Until the 18th century it was customary to isolate the insane from the healthy and to keep them beastlike in penitentiaries, prisons, or poor and sick houses. In Austria "care for the insane" proper began under Joseph II in 1784 when the Narrenturm (fools' tower) was erected in Vienna's General Hospital. Only in the mid-19th century did "madness" come to be regarded as an illness.
The Niederösterreichische Landes-Heil- und Pflegeanstalt für Geistes- und Nervenkranke "Am Steinhof" was opened in 1907 to keep pace with the steady increase in Vienna's population and the resulting lack of psychiatric hospital beds. At the time, it was the largest and most modern psychiatric institution in Europe. In cooperation with architect Otto Wagner, it had been built with an overall capacity of 2,200 beds and comprised 34 patients' pavilions (clinic, nursing home, sanatorium) as well as its own theater and church. The 1.43 square kilometers (0.55 square miles) area also housed a farm to supply the institution. However, despite many new approaches, the centralized safekeeping of mentally sick people in a large institution on the outskirts of Vienna perpetuated the principle of social exclusion.
During the First World War, up to 2,800 patients in the institution fell victim to the dramatic scarcity of food and infectious diseases. Steinhof did not remain unaffected by the 1920s reforms of "Red Vienna." Thus, in 1922 the first Austrian institution for the cure of alcoholics was founded in the Heil- und Pflegeanstalt der Stadt Wien, as it was now called, and the sanatorium for rich private patients was closed down and transformed into a sanatorium for lung diseases and tuberculosis.