Born in St. Lawrence County, N.Y., Keeley graduated at the Rush Medical College, Chicago, in 1863, and later entered the Union Army as a surgeon. At the end of the war he moved to Dwight, Ill., where he began his private medical practice. There, in 1880, he opened a sanatorium for persons addicted to the immoderate use of alcohol and opium. He assserted that "Alcoholism is a disease and I can cure it." His treatment centered on a secret preparation that he said contained bichloride of gold. However, chemical analysis revealed that the proprietary tonic contained 27.55% alcohol pplus muriate of ammonia, aloin and tincture of cinchonaa but no gold or chlorides. His hypodermic injections contained sulphate of strychnine, atropine and boracic acid.
In 1890, Keeley began selling franchises and by 1993 there were 92 Keeley Institutes in the US, Canada, and Mexico and that number grew to over 200 and expanded to Europe.
In 1939, Time magazine reported that "Unvarying is the traditional Keeley routine. An incoming inebriate pays $160, plus room and board, must stay for 31 days. His weekly whiskey ration is gradually tapered off: eight ounces the first day, six ouinces the second, four ounces the third, none from there on. Four times a day he gets gold chloride injections; every two houirs he takes a tonic." At its height, the clinic in Dwight treated 700 patients per day.
Keeley claimed that when his medicine was administered according to his directions, it had no injurious effects and that 95 per cent of the patients were permanently cured. If they did return to drinking, he insisted that they were cured but that they drank because they choose to do so, not because they were still addicted.
Keeley published numerous articles in the popular press in addition to pamphlets promoting his therapy, and wrote and wrote The Morphine Eater, or From Bondage to Freedom (1881)and the Non-Heredity of Inebriety (1896).
The Keeley Institute in Dwight was the last to close, doing so in 1966. Despite the modern assumption that Keeley's therapy was merely a successful example of quackery, Keeley is remembered as one of the first to treat alcoholism as a medical problem.