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The hospital was called St. Paul's Hospital and was owned by the Archdiocese of Edmonton. The Order of Benedictines ran the hospital for the archdiocese until they had to return to the United States due to their declining numbers. Archbishop Henry Joseph O'Leary then asked the Sisters of St. Joseph of the Diocese of London to take over operations. Sisters Loretto Traynor, Liguori O'Dwyer and Lenora Doyle were the first Sisters from the congregation to work at the hospital. They were all trained nurses and were known for their success managing the day-to-day operations despite financial difficulties. This was because there was no financial support from the provincial government for private hospitals at this time. By 1945, the hospital had 30 beds.

In the 1940s, it became evident that a new and larger hospital was needed. A district vote was held to decide whether the new hospital should remain a Catholic hospital or become a municipal hospital. The vote was in favour of a municipal hospital. The Archdiocese felt this was for the best because they were having trouble financing the hospital without provincial support and thought it was in the best interests of the community to ensure quality of healthcare by relinquishing ownership. Upon the transition of ownership and the withdrawal of the Sisters, they were thanked by the community for the work they had done. The Sisters returned to Edmonton or to London and were reassigned to other positions.

In 1925, the Board of Trade passed a resolution that the leaders of Stettler should ask Archbishop Henry Joseph O'Leary to set up a "Sisters' Hospital" in Stettler, Alberta. In turn, the Archbishop sent for four sisters from the Sisters of St. Joseph in the Diocese of London to run the hospital: Sister Patricia Coughlin, Sister Virginia Lobban, Sister Austin Gurvine, and Sister Jane Francis O'Rourke. They arrived in March of 1926.

Due to religious factions in the community, soon after it was known that the Sisters would be running a hospital, another proposal was made to establish a public municipal hospital instead. Since the voting on this issue was dragged out, the Sisters went ahead and began work in a small existing hospital. Upon arrival, the Sisters cleaned the building and ordered new supplies because the hospital was in a poor state. The local parish was very supportive and a nearby cottage was rented for the purposes of storage and an oratory for the Sisters to celebrate mass and have community prayers.

Meanwhile, a vote was finally conducted but failed to pass. After the district boundaries were redrawn, another vote was held in favour of a municipal hospital. Also around this time, the hospital's cottage was burned down by opponents. Both these factors contributed to the Sisters closing the hospital and moving to Galahad where the Village of Galahad had asked them to establish a Sisters' Hospital.