The South Carolina State Hospital, formerly the South Carolina Lunatic Asylum, is one of the oldest public mental institutions in the United States. The oldest, in Williamsburg, Virginia, dates from 1773. For several decades after its opening, Virginia's asylum remained an anomaly, the only institution in the country founded specifically to care for the insane. The South Carolina Lunatic Asylum, however, was founded at the beginning of a sustained wave of asylum construction. During the early nineteenth century, increased population density, growth of towns, and expansion of a market economy brought dissatisfaction with existing modes of caring for the insane in private homes and public poorhouses. Enlightenment empiricism encouraged a faith in human ability to solve human problems. European psychiatric innovations, particularly moral treatment, inspired therapeutic optimism, the belief that lunatic asylums could cure large numbers of the insane and restore them to productive labour.

Between 1817 and 1824, philanthropists in several northeastern states, often aided by public subsidies, opened private charitable asylums intended to serve patients of all social ranks. These institutions were influential, but they ended up catering to a small, mainly affluent clientele and did not provide the organizational pattern for American asylums. Neither did private proprietary asylums, which first appeared in the 1820s, and had become common in some parts of the country by the 1870s. The dominant type of mental institution in the United States has been public.