A place of mercy built under a reign of terror, the first hospital in America was constructed in 1503-1508 by order of Nicolas de Ovando, Spanish soldier, knight, and Governor of the Indies. Only a few years had passed since Columbus was removed from governorship of the island in chains, accused of gross abuses of power. Columbus was replaced by Francisco de Bobadilla, who was replaced just a few years later by Ovando.

Ovando arrived in Hispanola (now the Dominican Republic) from Spain with 2,500 colonists, including a young Francisco Pizarro, not yet a conquistador. The colony also included the Dominican priest Bartolomé de las Casas who would go on to write about the plight of the natives and African slaves to be amongst the first human rights activists of the new world.

Although this first hospital was founded under his rule, Ovando was no gentle ruler. He is remembered for his ruthless and violent suppression of native uprisings, and for forcing those who survived into a kind of indentured servitude. After his eventual return to Spain, he was replaced by Columbus' son Diego, whose home, the Alcazar de Colon, still stands nearby in Santo Domingo.

The hospital is named for the famous Saint Nicholas of Bari, Italy whose tomb emits a holy ooze that has been regarded as a cure-all for centuries.

Over its 350 years of operation it has been attacked by pirates, acted as a military hospital, and witnessed revolution. It finally succumbed to a combination of old age and earthquake damage, with much of the structure torn down in 1911 to reduce the risk of collapse. It now sits abandoned and in ruins, home to flocks of pigeons.