Blue Ridge Sanatorium opened on April 26, 1920 just outside of Charlottesville, Virginia. It was funded by a mill tax passed by the Virginia General Assembly in 1918. 1/8 of the funds raised by this tax were designated for prevention and eradication of tuberculosis. The State Board of Health was charged with administration of these funds. Catawba Sanatorium had been operating for nearly ten years with a lengthy waiting list. Piedmont Sanatorium opened outside of Burkeville in 1918 for African Americans. The Charlottesville area welcomed Blue Ridge Sanatorium by donating $15,000.00 toward the purchase of land and construction, and by offering to supply free city water to the sanatorium for its first five years of operation. Proximity to the University of Virginia Hospital added to the attractiveness of the location.

The Addison, Strode, and Thomas pavilions were constructed in 1919 to house patients, with men assigned to the Strode pavilion, and women to the Addison pavilion. When children were added to the patient population in 1922, they lived in the Thomas Pavilion. Rooms in the pavilions were connected to long porches where patients sat during the day and slept at night. Fresh air was considered a vital element in the curative regimen, which also included rest, moderate exercise, and a diet of fresh fruits, vegetables, milk and reduced animal protein. Early treatments also included the use of an Alpine lamp, a type of sun lamp believed to assist in the cure of tuberculosis. Patients organized the Cheer-Up Club to raise funds for needy patients, to purchase victrolas and records, and sponsor concerts for patients and staff.

Trinkle Infirmary was built in 1922. A chapel was added several years later, and the George W. Wright Memorial Pavilion was erected in 1927 with funds raised by the Grand Lodge of Masons of Virginia. A teacher joined the staff in 1923 to help resident children keep up in school. In 1937 an adult Rehabilitation School opened to help patients improve their economic circumstances upon release. To help with staffing, a training school for nurses was started in July of 1920 with one nurse in the first graduating class. In 1933, the training school for tuberculosis nurses established a formal affiliation with the Nurses Training School of the University of Virginia. The final graduating class of the Blue Ridge Nurses Training School held commencement exercises on May 24, 1962.

W. E. Brown oversaw much of the growth and changes at the sanatorium in his 23 year tenure as Superintendent from 1921 until 1944. During the years of the Great Depression, food was scarce and many people with symptoms of tuberculosis could not afford to apply for treatment. They waited until their cases were significantly advanced with less likelihood of a cure. The number of admissions of patients with advanced cases increased. At the same time over 1/3 of the patients discharged cited lack of ability to pay the $7.00 weekly fee as their reason for leaving, even when they were not considered cured. In 1932 the sanatorium purchased adjacent land which it used for farming and for establishment of a dairy herd to supply fresh milk to patients. In 1939 a new infirmary, the East Wing, was constructed with funds from a WPA grant to address the increase in advanced non-ambulatory cases.

World War II saw a drastic shortage in supplies and staff, as rationing reduced the quantity and quality of food products available, and the war created a shortage of nurses, orderlies and other trained workers. In 1943 an "Honor Camp" of penitentiary prisoners were put to work in the cafeteria. Screening for Selective Service resulted in identification of early cases of tuberculosis and more patients were admitted with less advanced cases. Interns from the University of Virginia entered into three month rotations at Blue Ridge, learning to perform "chest work" such as pneumothorax. This process involved using a needle to deliberately collapse the infected lung in order to give it time to heal and contain the lesion within. While diet and environment were never discounted as key aspects of treatment, surgical intervention became increasingly important. E. Cato Drash and other surgeons from the University of Virginia performed thoracic surgery on a growing number of patients. Frequently doctors and nurses diagnosed with tuberculosis came to Blue Ridge as patients and stayed on as employees.

In the early 1950s, new drugs were developed to assist in the cure of tuberculosis. These included isonicotinic acid hydrazide, streptomycin, para-aminosalicylic acid (PAS) and isoniazid. There was a steady decline in the waiting list for the sanatorium as more people remained at home and received drug therapy from their family doctors. In 1954, for the first time in its history, the sanatorium had vacancies for women. The average age of admitted patients was higher than previously, presenting additional challenges in addressing the health needs of an older patient population. In 1965 African Americans were admitted to Blue Ridge for the first time upon the closing of Piedmont Tuberculosis Sanatorium. In 1970 various proposals to expand Blue Ridge Sanatorium programs beyond treatment of tuberculosis surfaced. These included the integration of alcoholics with trustee prisoners into a program of work and rehabilitation.

The construction of Interstate 64 in 1968 cut through the sanatorium property and the farmland across the highway was deeded to the city of Charlottesville, the future site of Piedmont Virginia Community College. In 1978, title to the Blue Ridge Sanatorium property was transferred to the University of Virginia and it was renamed Blue Ridge Hospital. Tuberculosis patients continued to receive treatment there, but additional University of Virginia medical center programs were also located on the site. These included obesity and diabetic clinics as well as the outpatient division of the Department of Behavioral Medicine and Psychiatry. The University of Virginia LPN program relocated to Blue Ridge in 1979, and the Institute of Law, Psychiatry, and Public Policy was also located there.