While studying at the London Hospital, he lived in the East End and became aware of the large number of homeless children in the area. He became involved in the "Ragged Schools" movement, which aimed at providing basic education to very poor children. This involvement in the "Ragged Schools" movement was to have a fundamental effect on Barnardo’s future life as he slowly began to realise that helping homeless children in the East End of London was his real calling and not medical missionary work in China.

In 1868, he founded his East End Juvenile Mission in two small cottages in Limehouse. Then in 1870 he rented 18 Stepney Causeway and opened this as his first lodging home for sixty "homeless lads". Stepney Causeway soon became the Headquarters of "Dr Barnardo’s Homes", its new name. Dr Barnardo’s Homes was to expand until it had extensive properties on both sides of Stepney Causeway.

It was the proud boast of Dr Barnardo’s Homes that no child was turned away from its door. This statement was reflected in two large doors that formed the entrance to the Head Office in Stepney Causeway. These doors were covered in two large brass sheets on which were inscribed two doors slightly apart. This symbolically indicated that "Dr Barnardo’s Homes" door was always open, even when the Head Office doors were closed!

Dr Thomas Barnardo died in 1905 at the age of sixty.