On September 24, 1827, the House of Mercy on Baggot Street was opened. Anna Maria Doyle and Catherine Byrn, Catherine McAuley's first co-workers, moved into the House, while Catherine herself divided her time between Coolock House, her brother-in-law's home, and Baggot Street.

In January 1829, four months after she had sold the Coolock estate, Dr. William Macauley died suddenly. Catherine was now the legal guardian of nine children: her nieces and nephews, two young cousins, and two orphans. As the number of lay co-workers at Baggot Street increased, so did severe lay and clerical criticism of the House: Why did these women look like a religious order, yet not abide by the normal regulations of religious orders? Who was this "upstart" Miss McAuley? Why was the "unlearned sex" doing the work of the clergy?

By 1830 Catherine and her co-workers realized that the stability of the works of mercy they performed, including visiting the sick poor in their homes and in hospitals, and their continued appeal to co-workers, called for revision of their lay community. So, on September 8, Catherine, Anna Maria Doyle, and Elizabeth Harley entered the Presentation Convent in Dublin to begin formal preparation for founding the Sisters of Mercy.

September 24 1827

Feast of our Lady of Mercy: the House on Baggot Street opens as a school for poor young girls and a residence for homeless girls and women. Anna Maria Doyle and Catherine Byrn move in and begin works of Mercy.

May 15 1828

Death of Edward Armstrong, a priest of Dublin and Catherine McAuley's close friend and spiritual director in relation to the project.

September 10 1828

Catherine McAuley explains that Baggot Street is a place devoted to "the daily education of hundreds of poor female children and the instruction of young women who sleep in the house".

September 15 1828

Catherine McAuley sells Coolock House, and now resides alternately on Baggot Street or with her brother-in-law's family on Military Road.

September 24 1828

Daniel Murray gives permission for the House on Baggot Street to be called "of Our Lady of Mercy".

November 1828

Frances Warde becomes a resident member.

November 22 1828

Daniel Murray receives Mary Macauley, Catherine McAuley's niece, into the Catholic Church, and permits the community to visit the sick in their homes and hospitals.

January 25 1829

Death of Catherine McAuley's brother-in-law, Dr William Macauley. Each of his five children chooses her as legal guardian. She is now the adoptive mother of nine, including Catherine and Teresa Byrn, Ellen Corrigan, an orphan, and Ann Rice, a homeless child.

March 2 1829

Catherine McAuley registers her nephews –James, Robert, and William Macauley – as boarders at Carlow College.

April 8-9 1829

She establishes the Baggot Street Trust, which assigns the House of Mercy to Daniel Murray should she and her associates cease to fulfill the purpose for the House.

June 4 1829

Dr Murray dedicates the chapel in the House and opens it to the public, the funds generated from Sunday collections to be used to support the women and girls sheltered there. He assigns Daniel Burke, OSF, as chaplain to the House of Mercy, and Redmond O'Hanlon, ODC, as confessor to the community.

September 8 1829

Margaret Dunne joins the community.

November 22 1829

Catherine McAuley's niece, Mary Macauley, joins the community.

November 30 1829

Elizabeth Harley joins the community.

1829 - 1830

In the midst of clerical and lay criticism, Catherine McAuley and her associates decide, against her earlier judgment, to found an unenclosed religious congregation of women dedicated to the service of the poor, sick, and ignorant.

June 10 1830

Georgiana Moore joins the community.

July 12 1830

Mary Anne Delany joins the community.

September 8 1830

As preparation for founding the Sisters of Mercy, Catherine McAuley, Anna Maria Doyle, and Elizabeth Harley enter the Presentation Sisters at George's Hill, Dublin, and begin their novitiate on December 9, 1830.

June 28 1831

Death of Caroline Murphy at Baggot Street. She is buried in the Carmelite vault at Saint Teresa's Church, Clarendon Street, the first of thirteen Sisters of Mercy who will be buried there.