In 1938, the remainder of the Post Office building was demolished; the stones were used in a major reconstruction of Upper Meherabad. The crypt was deconstructed and rebuilt into Baba’s Tomb-Shrine using many of those stones. Baba asked Naoroji Dadachanji to design the dome, and to include the symbols of four world religions: the Zoroastrian flame, the Hindu temple, the Christian cross, and the Moslem mosque. Later that year, Baba asked the Swiss artist Helen Dahm, who was staying in the ashram, to paint the murals on the interior surfaces. The platform to the east was rebuilt and five meditation cells were added to commemorate the Sadak ashram.

The bathing rooms for Baba and Mehera on the east end of the Kitchen were also added during this construction phase of 1938. From that time, Baba’s meals, which were prepared by Mehera, were served to Him in the small room east of the main kitchen.

The upper story of Meher Retreat was also built then as extra living quarters, primarily for Baba’s western women disciples who were joining the ashram. Pendu and the crew worked rigorously for many weeks to finish the job by Baba’s deadline of August 25th, 1938. Baba was so pleased with their efforts to complete the construction on the Hill within this short period, that He garlanded and praised Pendu, Kalemama, and Naoroji. Pendu kept his garland for many years as a symbol of the one time when he felt he was able to please Baba.

The tower atop the building was added at that time as a distinctive feature that could be seen at a distance. The room in the tower was meant as a place for Baba to do seclusion work, but the location proved to be too windy, so He only used it for one day.

Baba’s eastern and western women disciples stayed in various groups arranged by Him in this building. Later, the upper story and the West Room were used during the 1954 Sahavas program for the Western men. The West Room is now a museum and the South Room has become a library. The upper story is now known as the Study Hall. Today the tower on Meher Retreat and Baba’s flag flying from its summit can be seen for miles around.

A small structure outside the south gate of Meher Retreat compound was built in 1938 to replace a separate small watch cabin and water tank platform from 1933. For many years, Soonamasi kept watch during the day from inside these cabins. Since there were no trees on the path in those days, she could see Baba as He crossed over the railroad tracks from Lower Meherabad. She would then walk down to meet Him. It was her duty and pleasure to escort Baba up and down the Hill. At night, a watchman would be on duty here.