By the 1890s, despite a depressed post-war southern economy and no federal funding for former Confederate soldiers, most southern states had established homes for indigent and disabled Confederate veterans.

The driving force behind the establishment of a care facility for former soldiers in Alabama was former Confederate officer Jefferson Manly Falkner, an attorney and public official in Montgomery who had served in the 8th Confederate Cavalry. Falkner donated 102 acres of land near the lumber town of Mountain Creek in the southeast corner of Chilton County for the proposed home. Mountain Creek was considered a healthy area owing to its high elevation and numerous springs and running streams. It also had convenient access to rail lines.

Falkner organized public fund drives for a proposed United Confederate Veteran's camp. He organized statewide efforts to sell tickets to hear former Tennessee governor Bob Taylor speak at the Montgomery auditorium on behalf of the Soldiers' Home in May 1902; the effort raised nearly $4,000. Notable individuals also contributed, including Booker T. Washington and Eli Torrance, commander of the Union Army veterans organization.

Construction of the facility began in April 1902. The large number of veterans applying to live at the home soon caused Falkner to ask for state assistance. In response, in October 1903, the State of Alabama assumed ownership and administration of the home. Falkner was appointed chairman of the executive committee of the Confederate Soldiers’ Home and served until his death in 1907.

The first veterans were admitted in May 1902. Any Confederate veteran from any state was eligible to be admitted to the home if he had been a resident of Alabama for at least two years before application, served honorably (verified by Confederate records held by the U.S. War Department), and had a yearly income of less than $400 (considered the poverty line at the time).

Wives were admitted with their veteran husbands if they had been married for at least five years and were more than 60 years of age. Wives of veterans who died at the home were supposed to leave, but records do not show any widows being made to leave; in 1915 this rule was changed to allow them to stay.

The Alabama Confederate Soldiers’ Home consisted of 22 buildings, including 10 cottages, an administrative building, a hospital, a mess hall, and barns. Staff size at the home varied; in 1927 the staff consisted of the Commandant, a doctor and nurse, a dairyman, two laborers, three dishwashers, two cooks, and two washerwomen. The facility was intended to house a maximum of 100 residents. However, during its peak years (1914-1918), as many as 104 residents lived there.

The last residing veteran died in June 1934. In October 1939, five remaining widows were transferred to the state welfare department in Montgomery, and the facility was officially closed. During its 37 years of operation, 650 to 800 veterans, wives, and widows resided at the home.

In 1964, during the Civil War centennial, an act of the Alabama State Legislature established Confederate Memorial Park encompassing the original 102-acre site of the home as "a shrine to the honor of Alabama's citizens of the Confederacy." In 1971, the site was placed under the authority of the Alabama Historical Commission.