During the Fall of 1973, members of the congregation of Grace Lutheran Church, under the guidance of Pastor Clint Rohr, identified a critical need for transitional housing in Oakville and began work to meet that need. Only a few months later, on January 13, 1974, Grace House formally opened on Cross Avenue in a rented house which had been refurbished and furnished by volunteers.

Oakville's first group home for troubled adults could now provide supervised accommodation for six potentially self-sufficient people in a safe and cooperative environment designed to prepare residents for reentry into society. To this end, responsibility for household chores was to be shared and residents were expected to contribute financially towards their room and board costs.

Initial operating financing for Grace House was provided by Grace Lutheran Church, through their human development fund, with the hope that eventually expenses would be shared by a cross-section of the community. An advisory committee composed of representatives of various community and social agencies in Oakville was immediately established and a volunteer program was begun.

Grace House quickly proved its worth to its community and in its first two years of operation helped over two dozen Halton area adults "through difficult transitions from severe emotional or social disorientation to varying degrees of self-sufficiency in the community."

During 1975, the community showed its support for Grace House by making generous donations to a Capital Fundraising Campaign. This allowed Grace House to purchase its own building and to move out of its rented premises.

Grace House was now in a relatively sound financial position and, since its goals, program, and organization were well-defined from the beginning, Grace House quietly continued providing a consistently needed service to the community while a couple of decades rolled by. Changes that occurred were evolutionary rather than radical. In 1979 Grace House became a non-profit corporation and acquired a volunteer Board of Directors. Over the years, as finances permitted, extra staff were added to increase the availability of counseling services. A transfer of funding and administrative responsibilities from the Ontario Ministry of Community and Social Services to the Ministry of Health (which occurred effective July 1, 1998) had no material impact. Instead, it was the desire of a property developer to build high rise buildings on the land occupied by Grace House which brought about the biggest change.

Since this proposed development was controversial in the community and experienced strong opposition, Grace House was uncertain as to the fate of their building for much of the 1990s. Fortunately, when the Town of Oakville finally approved the development plans, they included provision for the building of a new Grace House. A lengthy process of design consultations then preceded the beginning of actual construction.