The extraordinary "Professorship of Anthropology and Medical Psychology" established in 1864 at the university's Faculty of Medicine can be considered an early forerunner of medical psychology in Heidelberg. It was established specifically for none other than Wilhelm Wundt (1832-1920), who is generally regarded as the founder of experimental scientific psychology. Born in Mannheim-Neckarau, Wundt was an assistant to Herrmann von Helmholtz in Heidelberg from 1858 to 1863. Until his departure to Zurich in 1874 and from there to Leipzig, he taught medical students in Heidelberg in subjects including medical psychology, anthropology, physiology and practical training, long before he founded his now famous "Institute for Experimental Psychology" and associated laboratory in Leipzig in 1879.

Later, it was the Heidelberg social psychologist and Wundt student Willy Hellpach who wrote the first German-language textbook on medical psychology after the Second World War in 1946. Under the title "Clinical Psychology", which would be misleading in today's terms, it focussed primarily on the relationship between physical illnesses and the psyche.

Today's Institute of Medical Psychology was founded in 1974 as the "Department of Psychotherapy and Medical Psychology" at the Psychosomatic University Clinic by Walter Bräutigam, who had succeeded Alexander Mitscherlich as head of the Psychosomatic Clinic in 1968 and initially also held the position of acting head of the department. The premises were initially located in Voßstraße, but soon moved to a villa in Neuenheim at Mönchhofstraße 15, under the same roof as the "Department of Basic Psychoanalytic Research and Family Therapy", which was headed by Helm Stierlin and founded at the same time. The main task of the institute was to teach psychotherapy and medical psychology to medical students.

In 1980, the department was taken over by Hermann Lang and moved to Landfriedstraße 12 in Heidelberg's old town (now the University for Jewish Studies).

In 1991 Rolf Verres took over the management of the department and the associated professorship for psychotherapy and medical psychology. In 1992, the department moved again, this time to the left wing of the former eye clinic at Bergheimer Straße 20 near Bismarckplatz. In 1996, the professorship was upgraded from a C3 to a C4 professorship, the "Chair of Medical Psychology and Psychotherapy", and at the same time the department was renamed the "Department of Medical Psychology". In 2005, it was affiliated to the newly founded Centre for Psychosocial Medicine as the now independent "Institute for Medical Psychology". In 2013, Verres retired and Jochen Schweitzer-Rothers took over the management of the Institute on an interim basis. A detailed overview of the activities of the institute and its staff from 1991 to 2012 can be found here.

Beate Ditzen took over the management of the Institute of Medical Psychology and the Chair of Medical Psychology and Psychotherapy in the 2014/2015 winter semester.