The Mater Hospital was opened in 1962 by the Sisters of Mercy, a Catholic Order of Nuns originating from Ireland, three years after registering themselves as the Registered Trustees of an entity under the Perpetual Succession Act (the succeeding legislation after independence). The Sisters of Mercy first set up a 60 bed general hospital to cater mainly for the poor, indigenous Kenyans, with the primary mission being general healthcare.

The colonial authorities granted 12 acres of land in a swampy, mosquito-infested area, which has since become the Industrial Area of Nairobi. In 1970, a 60-bed maternity ward was opened with antenatal, postnatal and immunization clinics attached in order to upgrade the quality of maternity healthcare available to the poorer segments of the Nairobi population.

In 1972, in recognition of the contribution of the hospital in training midwives to assist births in rural areas, Mater was chartered as a School of Midwifery.

In 1975, a consultant's block of 6 offices was opened enabling specialised consultants to practice on site and deliver significantly better medical skills to the patients.

In 1986, the hospital opened its own pharmacy, physiotherapy and laboratory services and, in 1990, opened its counseling centre for inpatients, outpatients and staff who need advice and guidance on family planning, HIV, and other concerns of a psychological and/or physical nature.