Founded in 1385, at the initiative of Lemmo Balducci, in the Convent of the Nuns of San Niccolò, who had moved at that time to the nearby Via Alfani.. The scope of the institution was that of assisting the impoverished ill, under the direction and the patronage of the Money-changers Guild, to whose Patron Saint, Matthew, the hospice was dedicated. Assistance to the ill (who were accommodated here starting from 1410) was provided by volunteers who lent their services free of charge, while the hospital’s administration was directed by rectors, called spedalinghi, belonging to religious orders.

A few years after the middle of the 18th century the first experiments in smallpox vaccination were carried out, by inoculating children coming from the nearby Hospital "degli Innocenti" with the smallpox virus. These first vaccinations were performed for the purpose of experimenting the advisability of adopting this method of preventing the disease. The San Matteo Hospital was suppressed in 1784, along with many other small hospitals, and its property was expropriated by the Hospital of Santa Maria Nuova.

The Library of the Florentine Academy of Fine Arts has been housed in the former San Matteo Hospital since 1851-1853.