The lower story of the Meher Retreat building on the Hill was originally a water tank for the British Army camp. Meher Baba stayed here occasionally during the 1920s and secluded Himself in the west tank room during 1926 writing part of The Book. At that time there were no doors, so Baba, who was very agile, would climb up rungs on the side of the building and climb down a ladder into one of the two large tank rooms. Mehera and the other women would look up from the Post Office compound as Baba would wave from the top before going down into the east tank room.

In mid-June of 1927, Baba had doorways made to the Tank Rooms for easier access. The growing Meher Ashram was then shifted from the family quarters in Arangaon, to Upper Meherabad. Like the Hazrat Babajan School, the Meher Ashram was also a free boarding school for boys, but with greater emphasis on spiritual training. The Meher Ashram boys slept in the two tank rooms. The west room was also used as an assembly hall during the day. During that time, the south room was used as the office and quarters of the Meher Ashram superintendent, Buasaheb.

In May 1927, Baba chose a site west of the tank rooms and had a small hut of bamboo matting and steel sheets built there. On June 30th, when the new Meher Ashram for boys was transferred to the Hill, Baba spent that night in this new hut. Soon after, He ordered a pit to be dug on this spot - 6 feet long, 4 feet wide, and 6 feet deep. This pit was lined with stone masonry, and small steps were built leading down into the crypt. A platform was built extending from the east wall of the crypt so that Baba could greet visitors and gather with the schoolboys there. Another hut of wood and steel sheets was erected over the crypt with a door to the south and a window to the east. In August 1927, Baba began spending His nights here, and on November 10th, He began a 5-½ month period of seclusion and fasting. During this time, a row of structures made of bamboo matting was constructed, extending to the north from the Crypt Room. This became the Sadak (seekers) Ashram, and four men disciples fasted in seclusion inside these rooms for 2 ½ months beginning in December 1927. At the same time, Baba began to reveal spiritual explanations to the boys, and many of them experienced great inner transformation through His personal contact. This was the beginning of the Prem Ashram.

After the ashram returned from Toka in 1929, the wooden walls of the crypt room were replaced with soft stone construction, and windows were added to the north and west sides. Some beautiful photographs were taken of Baba and the Ashram boys on this site during that period.