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Due to an irreparable breech among the faculty of the Willamette University Medical Department, a new rival medical school, the University of Oregon Medical School, was established in Portland on June 16, 1887. The Board of Regents of the University of Oregon granted a charter to a group of physicians, including K. A. J. Mackenzie, H. C. Wilson, G. M. Wells and S. E. Josephi, each of whom had resigned from the faculty at Willamette University. A two-room grocery store was purchased by a joint bank note of $1,000 and was moved to property that belonged to Good Samaritan Hospital at the corner of Twenty-Third Avenue and Marshall Street. The school began instruction in the fall of 1887. When a new structure on Marshall Street opened in 1889, the small building was moved to Twenty-Third Avenue and Lovejoy Street. A new facility was constructed on Twenty-Third and Lovejoy Street in 1893, and the small building was moved to an adjacent lot.. The new medical school building was used until it was destroyed by fire on May 29, 1919. In 1890, the University of Oregon was in the top ranks of American medical colleges, and medical examining boards in all U. S. states and territories recognized its diploma. In 1895, to advance its educational standards, the school began issuing grades. Three years later, in 1898, it adopted the admission requirements of the American Association of Medical Colleges. The year 1905 marked the beginning of a long period of criticism, because a large number of students failed exams given by the State Board of Examiners. The faculty decided in 1907 to resign from the Association rather than be ousted; in 1908 only three out of eight students passed the exams. Medical societies and journals called for Oregon medical schools to either improve or disband.

Finances presented yet another problem for the school. In 1910 the medical school was intensely criticized by the Abraham Flexner report on medical education. In the same year the school was given a class A rating at a conference in Chicago and was classified among larger medical schools in the East. But, in order to maintain the rating, they had to maintain six salaried instructors on staff. An appeal to the Board of Regents at the University of Oregon brought an annual appropriation increase from $1,000 per annum to $2,500, and the state legislature appropriated $30,000. With subsequent appropriations the school was again on more stable ground, and by 1912 Josephi could report that they had been accepted by the New York State Board of Regents pending two more appointments.

After twenty-five years, S. E. Josephi stepped down as dean, and on May 12, 1912, K. A. J. Mackenzie took his place. Under Mackenzie standards and requirements increased. From the first the University of Oregon Medical School had the advantage of close connections with St. Vincent and Good Samaritan hospitals as places of instruction. Arrangements had also been made with the Multnomah County Hospital for teaching clinics, and an affiliation with the People's Institute, a clinic for the indigent, resulted in a joint organization, the Portland Free Dispensary. Attendance at the Dispensary by students, for credit, was made compulsory in 1913. In 1909 the University of Oregon Medical School proposed a merger with the Willamette University Medical Department. In 1910, the Willamette University Medical Department had been rated a class C and could not meet the standards of the Council on Medical Education. Nevertheless, it was not until May 23, 1913, that the departments merged, and the University of Oregon Medical School became the only medical school north of San Francisco and west of Denver.

Soon the school was outgrowing its facilities again. With limited support from the State Legislature and the Board of Regents, school officials explored other funding sources. Through his position as chief surgeon for the Oregon Railway and Navigation Company, Mackenzie received an offer of twenty acres of land owned by the company and located on Marquam Hill. Though the offer was met with opposition, due to the site's distance from the city center and difficult access, the gift was accepted in 1914, with the legislature appropriating $50,000 for a new building and $60,000 for maintenance, with a provision that $25,000 be raised elsewhere. These terms were not met until 1915, when the city of Portland donated the required $25,000.

World War I interrupted the building program begun by Mackenzie, and many of the faculty and staff were called into active duty. Mackenzie died in 1920, leaving his dream for the medical school campus in the capable hands of Dr. R. B. Dillehunt, third dean of the medical school, who successfully continued the construction of new medical school facilities. In 1921, the state legislature appropriated money for Mackenzie Hall, an addition to the original Medical Science Building constructed in 1919, and Multnomah County provided funds to construct a new county hospital on nine acres adjacent to the new school facility. Between 1924 and1939, the campus was enlarged by the construction of the Veteran's Bureau Hospital, an outpatient clinic, the Doernbecher Memorial Hospital for Children, the University State Tuberculosis Hospital, the Library and Auditorium Building and Emma Jones Hall, a dormitory for nursing students. In 1932 the University of Oregon transferred its nursing program to the Medical School campus in Portland, renaming it the University of Oregon Medical School Department of Nursing. Gaines Hall, the former Portland Medical Hospital, was purchased in 1943 as a housing facility for nurses.

Dr. David W. E. Baird, a graduate of the University of Oregon Medical School, intern, instructor, physician, professor and researcher, became the fourth dean of the medical school in 1943, when Dr. Dillehunt retired. After World War II state funds were available for more staff and for new construction projects. Baird Hall was built in 1949. In 1954 the Crippled Children's Division building was constructed, and in 1956 state and federal funds helped to complete the Medical School Hospital. A new wing to Emma Jones Hall was built in 1952, and in 1956, the University of Oregon School of Dentistry was completed. Within the span of the next decade, the campus was further expanded by the addition of the Research Building, the Portland Hearing and Speech Center, and additions to existing structures.

In 1968 Dean Baird was succeeded by Dr. Charles N. Holman. Motivated to educate more medical and nursing students, he recognized that there was a need for still more space. The needed space was provided by the construction of the Basic Science Building in 1972. In 1974, after the retirement of Dean Holman, the University of Oregon Health Sciences Center was founded when the medical school merged with the School of Dentistry, the School of Nursing, University Hospital and University Clinics and the Crippled Children's Division. At this time Dr. Lewis W. Bluemle was hired as the president of the new institution. The center, under the direction of the Oregon State System of Higher Education, was given the authority to grant degrees independent of the University of Oregon.

In 1981, by an act of the Legislature, the institution was renamed the Oregon Health Sciences University. In just over a decade the campus was expanded by the addition of several new centers for research and patient care. The Vollum Institute for Advanced Biomedical Research opened in 1987. Construction was completed in 1991 on the Casey Eye Institute and the Biomedical Information Communication Center. In 1992, the School of Nursing building was completed as well as the addition to the Basic Science building, the Center for Research on Occupational and Environmental Toxicology. The Physicians Pavilion opened its doors in 1993, providing new space for outpatient services.

In 1995 OHSU became a public corporation, separate from the Oregon State System of Higher Education. The institution is governed by a Board of Directors that is nominated by the governor and approved by the State Senate. The campus has been enlarged by the addition of the Mark O. Hatfield Research Center and the new Doernbecher Children's Hospital in 1998, continuing a tradition of advancements in research, patient care and education.