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In the year 1924 - 25, Ayurvedic Aushadhalaya was established to 1. prepare medicines, 2. teach Ayurvedic students the formulations, and 3. make the Ayurvedic formulations available to general public at affordable price. To help in this arrangement a large Botanical Garden was created for raw materials that still continue to discharge its purpose.

In the next series of developments, Maharaja Sir Prabhu Narayan Singhji of Banaras laid the foundation stone of the Ayurvedic Hospital on 19th January 1924.

Years later, in 1960 the Ayurvedic College was converted to the College of Medical Sciences with Professor K.N. Uduppa as its founder principal. The College of Medical Sciences then had 10 Departments - 9 in Modern Medicine and 1 in Indian Medicine. In 1963, MBBS training was recognized both by General Medical Council, U.K. and Medical Council of India. The Post Graduate Institute of Indian Medicine (since 1963) was merged with Institute of Medical Sciences established in 1971.

The postgraduate medical education, started as in-service program in 1963 (3 years after establishment of Medical College), took the form of a formal training program in 1971 after due permission from the Visitor of the Banaras Hindu University i.e., the President of India. This upgraded College of Medical Sciences to Institute of Medical Sciences in 1971.

Further growth of postgraduate education continued with approval of DM and MCh courses in 10 Superspecialties in 1976. In 1978, the existing Faculty was bifurcated into the Faculty of Ayurveda and Faculty of Medicine to facilitate their independent growth.