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It is the first time that the brand has opted for a lengthier experience which is also shoppable.
The five-week installation, which launches its "Colour by Numbers" collection, features the new clothing, as well as events such as yoga sessions, a walk-in nail clinic and styling advice workshops.
Ted Baker's marketing manager, Irene Celli, said: "We wanted a space where people could interact with the clothes and we could give them a memorable experience.
"With five or six weeks we get the time to get the consumers to come back and really interact with them on a deeper level."
The activation is in Old Street Station in London until 4 May. It was created in-house.