By the beginning of the twentieth century the problem of mental illness in Edinburgh had become acute, and the need for a new psychiatric hospital was pressing. Situated 14 miles from Edinburgh in hilly woodlands, Bangour, near Broxburn, was the ideal place for such a hospital. The hospital was to be modelled on the Alt-Scherbitz asylum near Leipzig in Germany, but the first buildings were constructed hurriedly and were very basic temporary structures. The first patients from the Royal Edinburgh Asylum were transferred to Bangour in 1904, and the hospital was officially opened on 3 October 1906.

In 1915 Bangour Village Hospital was taken over by the War Office as a military hospital. Its patients were transferred to asylums around the country. The numbers of staff and beds were increased substantially to cater for the influx of wounded soldiers who began to arrive in June of that year. By 1918 the hospital had reached a record capacity of 3000 patients, crammed into wards, huts and specially-erected marquees. After the war, in commemoration of the vital role played by the hospital, Bangour Village Church was erected and opened in 1929.

Bangour re-opened as a psychiatric hospital in 1922. However in 1939 the hospital again became the Edinburgh War Hospital, with an additional annexe, which became Bangour General Hospital.

In the 1950s Bangour Village Hospital began to take patients from West Lothian as well as Edinburgh, finally ceasing to take Edinburgh patients in 1974. As a result of the National Health Service (Scotland) Act of 1947 and the creation of South East Regional Hospital Board Scotland, in 1948 Bangour Village Hospital came under the management of West Lothian Hospitals Board of Management. The revised Act of 1972 saw hospital administration simplified and so after 1974 the hospital became part of West Lothian District of Lothian Health Board, but the publication in 1983 of the Griffiths Report forced further change and the district became West Lothian Unit in its own right. Since further reorganisation in 1994 it has been managed by West Lothian NHS Trust and, from 1999, West Lothian Healthcare NHS Trust. The hospital closed in 2004.