In 1997, the leader and founder of Hospitāļu Iela, Edgars Šubrovskis (guitars, vocals) decided to create a project for releasing his songs. In 1999, the band had too many unreleased songs, which they did not want to keep locked in a drawer for ages. The Limbažu alternative music enthusiast Ivars Muste offered them a four-track recording. With help from Blissful’s drummer Artūrs Ābrams and guitarist Ivars Muste from the same band, Šubrovskis recorded twelve songs. They also got help from the violinist Dina Skreitule, and singer Arta Deniņa from the girl band Granātābolu namiņš. The entry, titled Ir Maiga Nakts, the name was borrowed from the novel by Francis Scott Key Fitzgerald, was sent to the festival, Sinepes un Medus.
After the first record, the band’s lineup has changed several times; the band also went on a few short-term hiatuses. Nevertheless, the band recorded their first studio album in Inguss Baušķenieks (Dzeltenie Pastnieki) studio for a whopping two years. The new album, titled Pilnmēness, was released in 2004 and issued by Raibā Taureņa Ieraksti. The band’s biggest achievement so far was winning the annual festival Liepājas Dzintars.
In 2005, the band presented its second album, Nav centrs, and the first video single Kaķis. The text of the self-titled song Hospitāļu Iela in Nav centrs was written by the late Klāvs Elsbergs, a pre-independence poet quite famous in Latvia, but the track Elizabete used samples from The Doors’ songs. In late 2005, a new vocalist Anna Lebedoka joined the band where she also played percussion and melodics. In 2007, Hospitāļu Iela presented their third album Pūķis.
In 2010, the band officially announced their break up. In 2011, they got together one more time to play at the presentation of independent music album by Rainis poetry, Strāvoklis.
Their last lineup were Edgars Šubrovskis, Dina Skreitule (violin), Maija Ušča (bass guitar), Toms Circenis (drums) and Edgars Mākens (keyboards).