Recent studies have drawn attention to the relationship between healthcare environments and patient outcomes. Yet, it remains unclear how changes in the design of healthcare facilities are experienced by providers. To understand this relationship, this study employs an inhabited institutionalist theoretical frame to assess longitudinal ethnographic and interview data collected at a neonatal intensive care unit (NICU) as it transformed from an open‐bay unit, to one with single‐patient rooms. Findings show that changing the structure of the NICU interfered with the original local organisational culture of collaboration. While providers actively worked to maintain the original culture, their success in doing so was mediated by the built environment. Responding to the new space, practitioners developed new practices. Some of the practices (such as doorway discussions and increased individual assessments) directly undermined the original organisational culture, whereas others (hallway hangouts and calling out) worked to transpose the original culture into the new space. These findings call for greater attention to the effect of physical space on organisational culture.