From both inside and outside the asylum, religion played a considerable role in shaping the way that people viewed insanity and treatments of mental health. For centuries, people believed that insanity was caused by "religious excitement" or "religious melancholy", and that insanity was the Devil driving people mad. By the 19th century, the understanding of insanity had advanced and numerous mental health facilities, including the London Asylum for the Insane, believed in the therapeutic properties of religion. As a result, asylums incorporated regular church services into their treatment plans, and made places of worship available to their patients.

Since its establishment in 1870, the London Asylum has been associated with the Congregation of the Sisters of St. Joseph and the Catholic Diocese of London. After settling in London, Ontario, the sisters became an integral part of the spiritual and social network of London. The Asylum was founded upon principles of faith and caring, ideals which continue to be highly valued by St. Joseph's Regional Mental Health Care London.

Prior to the creation of an on-site chapel, religious services at the LAI were held in the general recreation facilities. These services were located up three flights of stairs, raising concerns about the elderly not being able to attend services. Combined with a desire to have a place dedicated specifically to spiritual matters, Dr. R. Maurice Bucke petitioned Public Works Ontario for the creation of a chapel. In 1884, the Chapel was constructed, and was used weekly by patients for both Protestant and Catholic services.

The inclusion of multi-denominational services reflected the diverse religious population of the LAI. In 1891 the majority of LAI patients were Anglican. By 1922, the most frequently admitted religion was Methodist, and by 1940 most patients were Roman Catholic. The Chapel was designed to accommodate both Protestant and Catholic services. The Chapel was constructed with both a Roman Catholic alter and a Protestant alter, at opposite ends of the building, and the pews were designed to be interchangeable so they could face the appropriate altar.

Traditionally the religious needs of the LAI were fulfilled by generous volunteers of the local faith community. Religious services, prayer sessions, and spiritual counselling, were performed by local ministers from various local parishes. In 1884, the permanent position of organist and choirmaster was created. It was not until the mid 1900s that a full-time minister was hired by the LAI. Prior to that time the LAI relied on the generosity of volunteers and some part-time staff. The creation of the organist position and the dedication of various faith volunteers, reflects a commitment to the inclusion of faith within the moral therapy mandate of the LAI community.

The artistic design of the Chapel reflects the idea that religion and spiritually could be combined with moral therapy to promote recovery. The stained glass windows combine religious images with images of the Asylum, reflecting the role of religion in moral therapy. Since the development of moral therapy, religion has been used alongside other therapy techniques. Most often religion has been used to help patients come to terms with their lives, to provide support during times of hardship, and to foster a sense of community amongst patients. This merging of religion and treatment is also demonstrated in the religious objects created by patients. The intricate prayer bench created by a patient in 1960 is a present day example of moral therapy and its relation to spirituality.

In 1970, the Chapel was renamed the Chapel of Hope and various rejuvenation projects were undertaken to restore the inside of the Chapel to its former glory. A heritage plaque commemorating Dr. Bucke's contributions to mental health care, moral therapy, and the city of London is displayed outside of the Chapel, which has been designated a protected heritage site, and is still used for services and functions today.