Millions of people were forced to leave their homelands with the outbreak of World War One in 1914. They fled from the fighting or were forcefully evacuated and accommodated elsewhere in the hinterland. Soon after the responsible authorities in Vienna took the decision to construct a refugee camp in the area of the current Gmünd-Neustadt, planning work was initiated for the “settlement” that had been designed on the drawing board. Because agreement had been reached with the land owners for preliminary lease in December 1914, construction was able to start on 15 December on the area consisting of around 55 hectares. Constructing the camp was carried out as rapidly as the planning work – the wooden barracks were literally stamped out of the ground. The camp buildings were initially mainly of wood because the authorities expected that the war would last just a few months, or at the most one to two years. The durability and resilience of the barracks were correspondingly poor. After a construction period of just a few weeks, the first people took up accommodation in this refugee camp that was one of the largest in the Austro-Hungarian monarchy in January 1915. Around 200,000 refugees from all regions of the monarchy were accommodated here during the war.

Due to the illness and disease that repeatedly broke out in the camp, a hospital was set up that with around 2,500 beds had even more patients than the Vienna's current General Hospital (AKH).

However, thousands of refugees in the Gmünd camp died due to these epidemics and diseases. The precise number of deaths can no longer be reconstructed due to lack of documentation, but it is assumed that around 30,000 people found their last resting place in the still existing camp cemetery. The number of dead also included hundreds of children and babies. From 1915 to 1917, 484 children died before reaching their first year of age due to complications from measles alone. The dead were carried through the “Birkentor” to the camp cemetery and buried there.

The refugee camp constructed in 1914 formed the basis for Gmünd-Neustadt after 1918. Both residential homes for camp hospital nurses still exist today.