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It was located next to Central Prison, from which "ingredients" were taken from among the death row inmates. After Edward makes it into the heart of Lab 5 and encounters the Slicer Brothers and Lust and Envy, the building's explosives are activated, destroying all evidence of the immoral experimentation that had gone on within. It is later revealed that all the scientists involved with Laboratory 5 had disappeared mysteriously just days before its destruction, and implied that the they had been used as ingredients for a Philosopher's Stone themselves. Laboratory 5 was also said to have been under the jurisdiction of Brigadier General Basque Grand, who had already been murdered by Scar by the time the Elrics discovered it.
The truth as to Lab 5's nature is later revealed to be far more sinister than even a human testing laboratory. Lab 5, along with the other four alchemical labs in the city, form the corners of a large pentagon that surrounds the city centre. Additionally, they are on the perimeter of a large circle that encompasses the pentagon, and is the inner layer of the Nationwide Transmutation Circle created by Father. In addition to being part of the Nationwide Transmutation Circle designed to condense all the souls in Amestris into a giant Philosopher's Stone, the circle within Central has another purpose. When activated, all alchemists within its perimeter who have attempted human transmutation are taken apart, brought to the Gate, and then brought before Father deep underground in order to become human sacrifices for the Promised Day. However, transporting the sacrifices unharmed requires additional human material and energy (in this case, the rejected Fuhrer Candidates), just like Edward's attempt to transmute himself out of Gluttony's required the energy of Envy's Philosopher's Stone.
In the 2003 anime, Lab 5 was also home to numerous chimera who assist in guarding the facility and Human Chimera being held for experimentation. Additionally, the lab served as an alchemical prison and stasis field for the rogue Homunculus Greed, who had been housed within its lower levels for roughly a hundred and thirty years.