When St. Nicholas' Hospital came into being is unknown. It might been associated with Harnham, a village on the south bank of the Avon, before the bishop founded his new borough on part of his manor of Salisbury on the north bank. But more likely it was Bishop Richard Poore, the founder of New Salisbury (which in time eclipsed and superseded the hill-fort of Old Salisbury, in which both king and bishop had a share of the lordship), who established the hospital after beginning construction of his new cathedral. The hospital was located south of the close, near a crossing of the Avon. The hospital is mentioned in 1214 and in 1227 it received endowments from the Bishop and from the Countess of Salisbury; at that point the hospital had a chapel, chantry commitments, and the mission of catering to the needs of the sick, the poor, and travellers.

The next bishop (Bingham) made such major changes that he subsequently claimed, and for some time was believed, to be the hospital's founder. He built a new bridge at the Avon crossing and a chapel on the bridge, and then rebuilt the hospital, adding new buildings to the south of the original. The constitution he issued for the hospital in 1245 associated the maintenance of bridge and chapel with that of the hospital. The purpose of the hospital was stated as to receive, help, and support the poor, the weak, and the sick. A warden was given the duties as administrator of the property (including the bridge) and its revenues, as supervisor of the charitable obligations towards the inmates, and as principal priest conducting the divine offices – with emphasis on masses for the souls of Bishop Bingham, the hospital's benefactors, the residents, and anyone who died in the hospital – assisted by three other priests. They were to wear, when in public, russet cloaks as their uniform, to eat communally in the refectory, and two were to sleep in the hospicium on the bridge while the warden and the third priest slept at the hospital. Patronage of the hospital had been transferred by Bingham to the Dean and Chapter, but was returned to a later bishop in 1260, possibly in relation to episcopal plans for the foundation of de Vaux College nearby, on land that was part of the hospital endowment.

The new hospital took the form of a church, but with only two aisles, separated by an arched arcade; this had led to speculation that it may have been designed as an infirmary segregating male and female inmates, each into their own half. At the eastern end was a chapel, with an altar dedicated to St. Nicholas on the proposed male side, and one dedicated to St. Mary on the female side. In the final years of the fifteenth century, the south aisle was divided up into six cubicles, as more private quarters for the brethren and sisters, and an upper floor added with further rooms, some for the master and chaplain; the north aisle served as a common hall. Besides the priests there were some lay brethren, tasked with serving God in the hospital; it is not clear if they were included among the poor or sick inmates. We have explicit references to sisters from the late thirteenth century. The inmates were apparently admitted for life.

Neither the hospital nor its neighbour, and possibly associate, the college were wealthy in terms of endowments. While the latter's expanded through the Middle Ages, however, some of the former's were lost. This, along with falling rent values and some poor fiscal administration, caused the hospital increasing difficulties, obliging it to restrict its activities to what its revenues would support; the bridge had become ruinous by 1413, requiring a royal grant of pontage to restore its integrity. A new constitution issued by Bishop Beauchamp in 1478 shows that the hospital had become by then only an almshouse for a limited number of inmates (probably 12), at least some of whom were its own retired or incapacitated staff; this had probably been the case since at least the 1440s. Most entrants were from the city or the surrounding region of Hampshire; some were widows, others married couples.

The ordinances of 1478 stated that brethren and sisters were to have an allowance of 7s.6d a week, divided between them, and annual provision of 16 wagonloads of firewood and 1 wagonload of coal. That this was recognized as meagre is suggested by the prohibition of inmates begging on the street. As indicates of necessary economies, temporary hospitality was to be available only to benefactors, and those admitted were required to own a certain level of property; that property would henceforth be administered by the warden, who would use its revenues to support the clothing and other needs of the former owners. The warden was also required to pay for the services of a barber and laundress, as well as supply everyday utensils. He exercised disciplinary authority over the inmates, punishing any guilty of quarrelling, or co-habitation of unmarried men and women, and similar faults. Sharing of quarters was permitted only in the case of a man and woman who had been married before entering the hospital.

The admission regulations and/or oath set out above stems from the new ordinances, although the copy in the chartulary may have been made a decade or two later. The final instruction by the master invites the entrant to take the three monastic vows of chastity, obedience, and poverty. Psalms and prayers followed that, and the ceremony closed with the new entrant receiving the kiss of peace from each of the inmates.

Another hospital was founded in Salisbury in 1379, by Agnes Bottenham, in an act of penitence over her past as a brothel-owner. On the site of the brothel she built the Trinity Hospital to provide a home for 12 poor persons, temporary shelter (up to 3 nights) for 12 others, and care for the sick. Provision of an endowment by a citizen in 1400 enabled it to expand to 30 beds. Rebuilt in the eighteenth century, it continues to function as the city almshouse today.