The foundation of the Institute was laid in 1936, when Dr. Oskar Diethelm, Chairman of the Department of Psychiatry and Director of the recently opened Payne Whitney Psychiatric Clinic, began assembling books and journals important to the history of psychiatry, convinced as he was of their value to clinicians. Stimulated by this growing resource, Dr. Eric T. Carlson formally launched the History of Psychiatry Section (as the Institute was originally known) in 1958, when he received a grant from the National Institute of Mental Health to pursue research into the history of American psychiatry. At the same time, Dr. Diethelm appointed him to a newly created position as Director of the Section.

Under the leadership of Dr. Carlson, the activities and collections of the Section steadily expanded to serve a wide range of interests, from the education of medical students and residents to the exchange of ideas among historically oriented scholars from many disciplines. In the early 1960's, Dr. Carlson instituted the biweekly research seminars, which in 1993 were renamed the Richardson Research Seminar in honor of the Richardsons' generous support.

	Hermine Hug-Hellmuth (1871-1924) (From the Jelliffe lantern slide collection, Oskar Diethelm Library)

When Dr. Diethelm retired in 1962, the Section's rare books library was named in his honor. The Oskar Diethelm Library now contains over 50,000 printed items, constituting the most comprehensive collection of its kind in the United States. Initially, the emphasis was on collecting British and American works from the 17th, 18th, and 19th centuries as well as Renaissance works in Latin. As the Library grew, however, it developed major collections dating from the 15th century in French, German, and Italian, as well as acquiring selected works in Arabic, Dutch, Hungarian, Portuguese, Russian, Spanish, and Swedish.

In 1976, the manuscript division of the Library was officially established, indicating its growing importance as a repository for the unpublished papers of many organizations and individuals vital to the history of psychiatry.

In 1992, Dr. George J. Makari assumed the Directorship of the Institute. Dr. Makari has undertaken a number of initiatives, including the launching of the Cornell Studies in the History of Psychiatry book series, the inauguration of the Carlson Grand Rounds in the History of Psychiatry, the creation of specialized research working groups, and the modernization and professional cataloguing of the ODL's holdings. In 1998, Diane Richardson, M.L.S. was appointed Special Collections Librarian. In 2003, Nathan M. Kravis was appointed Associate Director of the Institute