Watervliet's name—Dutch for "flowing water"—derives from a creek that meanders through town. A sawmill established on its bank in 1833 grew into the Watervliet Paper Company, which operated a paper mill from 1910 until the mid-1990s. The mill was torn down in 2001 and 2002.

Community Hospital incorporated in 1949 as a not-for-profit health care facility with a local voluntary board of trustees. Originally it occupied a 19-room mansion—built in 1894 by a paper-manufacturing tycoon—to which several wings were added in the 1950s and 1960s.

Construction of the current 65,000-square-foot building began in 1976; it accepted its first patients in 1979. A long-term expansion plan contemplates adding 20,000 square feet within five to 10 years for a fourth operating room and additions to the emergency room, laboratory, and radiology unit.

For cases that exceed Community Hospital's capabilities, an affiliation with Borgess Health Alliance provides ready access to more sophisticated care. Based 40 miles away in Kalamazoo, Borgess Health Alliance serves 1.7 million people in 12 southwest and south-central Michigan counties. It's a member of Ascension Health, the largest Catholic and largest not-for-profit health care system in the United States, with 16,727 beds in 15 states and the District of Columbia.