In April 1942, two British Base Transfusion Units with their associated field transfusion services were made available to India.  These transfusion units were responsible for the production of Crystalloid solutions and providing blood transfusion.Soon after the World War II was over, the Blood Transfusion Units were disbanded and a centralized Army Transfusion Centre was established in Poona to cater to the transfusion requirements of the Army. 

The Department of Transfusion Medicine was formed on 01 May 1948 by incorporation of the Army Transfusion Centre with Armed Forces Medical College(AFMC). The first HOD was Padmashri Lt Col GWG Bird, who discovered Lectins. Lectins are seed extracts which are very useful in blood banking.

The department manufactured and supplied all resuscitation fluids.  It ran a blood bank for Military Hospitals located in Poona and even extended its services to civilians in times of need.  It manufactured dry plasma and blood grouping sera for the Armed Forces, which was  discontinued in 1972.  It was also responsible for the preparation and assembly of all transfusion sets for supply to hospitals and field units.  Since 1997 the manufacture of Crystalloids at BTD, AFMC has been completely stopped.

Today it has a state-of-the art licensed Blood Bank with Component facilities. In addition, it regularly undertakes Plasma exchange therapy, prepares Single Donor Platelet Concentrates and processes haematopoeitic stem cells for clinical applications.  The Department of Bio-Technology (DBT) through the National Centre for Cell Sciences (NCCS) established the Haematopoietic Stem Cell and umbilical Cord Stem Cell Lab on 09 Dec 2000.