From the eighteenth century onwards, Grangegorman was to be transformed from an agricultural hamlet to an urban centre dominated by penal and welfare institutions. In 1704 Dublin's first House of Industry was established on St. James's Street south of the River Liffey, on the site currently occupied by St. James's Hospital. However, from 1729 this institution was converted into the rather notorious Dublin Foundling Hospital. In 1771–72 a philanthropic body called "The Corporation for the Relief of the Poor" was instituted following the passage of permissive legislation and this entity was responsible for the opening in 1773 of Dublin's second House of Industry which was situated at the site of the derelict malthouse on Channel Row on what is now North Brunswick Street. Channel Row at this time was considered to form part of the locality of Glassmanogue to which also belonged the area known as Broadstone. The establishment of this institution was to be the single most important factor in shaping the urban character of Grangegorman as a site increasingly predominated by the presence of a range of institutions meeting nineteenth-century expectations of philanthropy, care and social control.
The decision to site the House of Industry in this part of the city no doubt reflected the fact that the local population in Grangegorman and the surrounding districts of the north west of Dublin were and are overwhelming proletarian in nature. Indeed, this reflects a long-standing east-west divide in the city, which continues into the present day. In popular tradition the population of north Dublin is perceived as significantly poorer than its southern counterpart. In point of fact, the proper division is on an east-west axis with the eastern districts enjoying a far greater level of affluence. In the parishes of St. Paul's and St. Michan's, resting either side of Smithfield in the north west, between 76 per cent and 79 per cent of the population were considered working class in 1797. Conversely, in the parishes of St. Thomas and St. George in the north east of the city the percentage of the population which was working class was 45 per cent and 31 per cent respectively. A degree of elite distaste toward the behaviour of working class populations is revealed in the visitation report of an episcopalian archbishop to the region of Grangegorman-Glassmanogue in 1727 when he described the local population, who lacked a church at this point, as lewd and unruly.
In 1787 the Governors of the House of Industry considered the need for new accommodation to provide facilities for some two thousand inmates. The old malt house was in a ruinous condition and by the 1790s was deemed in danger of collapse. In September 1791 work began on the New House of Industry at a plot adjoining and to the north of the original building. The site of this building, now demolished, was located at the end of Morning Star Avenue. In 1798 the Governors of the House of Industry petitioned the Irish House of Commons to build a proper infirmary. Work on this, the Hardwicke Fever Hospital, began in 1803. To cope with the increasing number of children in the workhouse, the Bedford Asylum for Industrious Children, named after the then Lord Lieutenant and the Duke of Bedford and designed by the noted architect, Francis Johnston to accommodate one thousand children, was constructed in 1806 on a site on North Brunswick Street. To care for the 'ruptured poor', the Richmond Surgical Hospital was opened in 1810. The building used for this hospital had been a convent constructed in 1688 by the Benedictine Nuns in Channel Row, opposite Red Cow Lane. Subsequently it passed into the possession of the Dominican Nuns who largely rebuilt the structure. The hospital was subsequently rebuilt in 1900 in distinctive red-brick. This building still stands and currently functions as the Dublin Metropolitan Court. In 1814 the Whitworth Hospital for chronic patients was built on a site just to the south of the new House of Industry. On 24 April 1820, the Talbot dispensary was opened and attached to the Richmond Surgical Hospital to afford relief to those among the sick poor who were not considered suitable for hospital accommodation and were resident in the north west district of Dublin.