As the primary care facility for the City's African Americans from 1923 to 1966, it played a significant role in the community. Mercy Hospital was the site of protests demanding the desegregation of the City's hospital facilities during the Civil Rights movements of the 1960's. By the late 1950's the rapid population growth of the City was overcrowding both Mound Park and Mercy Hospitals; however, a proposed $1.7 million addition to Mercy was rejected by City Council. Consultants to the City urged the integration of the two hospitals, but staff physicians and the administration of Mound Park strongly opposed this plan to City Council. In June 1960, a new City staff report advised the expansion of Mercy Hospital before integration, provoking a strong negative response from the African-American community. The bond issue for the expansion of Mercy was delayed in July 1960, creating further tension. The NAACP became publicly involved in the hospital integration controversy in November 1960 and African-American physicians at Mercy boycotted the hospital. The Mercy expansion was voted down by City Council on November 21, 1960. A plan for devoting one wing to African Americans at Mound Park was suggested by the City Manager's office in December, 1960; this infuriated many in the white community and approximately 300 people protested at a rally in January 1961. City Council still favored the plan and whites started a petition drive to oppose the integration of Mound Park and to force the issue to a public referendum. The doctors on staff at Mound Park also publicly criticized the plan for an African-American wing.

The administration of Mound Park Hospital formally admitted the first African-American patient to the hospital on February 25, 1961 and informed the press the hospital was now integrated. Meanwhile, the referendum petition was certified and the City Council quickly dropped plans for the African-American wing. The City Council eventually voted to expand Mercy in January 1962; the total budget of the project was $865,000 and would increase the capacity from fifty five to seventy-eight beds. The new Mercy Hospital addition opened in February 1963, designed by the architecture firm of Reynolds, Smith & Hill and constructed by Biltmore Construction Company.