In the 21st year of the reign of Emperor Kuanghsu, Ching Dynasty, (or the 28th year of the reign of Emperor Meiji, Japan, A.D. 1895), during the early years of Japanese rule of Taiwan, the Regenerative and Products Bureau of the Japanese Governor General's office planned to establish a nursery, and on January 6, selected an 8750-ping（ha）lot near Nanmen (South gate) in Taipei City for this purpose. This was the forerunner of the Taiwan Forestry Research Institute. In the 25th year of Kuanghsu’s reign (1899), the nursery was relocated to the Talongtungand Yuanshan areas to the north due to construction of an army garrison hospital on the original site. In October of the following year, 1900, a new plot was purchased at the present location of the Taipei Botanical Garden to reestablish the so-named Taipei Nursery. The nursery endeavored to nurture seedlings and cultivate saplings. By the 3rd year of Emperor Shuantung’s reign, Ching Dynasty (44th year of Meiji, 1911), on the foundation of the Taipei Nursery, a Forestry Experimental Station under the aegis of the Regenerative and Products Bureau of the Governor General's Office was set up to shoulder the responsibility for forest management in Taiwan and to undertake surveys of forest resources. By the 10th year after the founding of the Republic of China (10th year of the reign of Emperor Daisho, 1921), the Japanese unified all research institutions and established the Central Research Institute.

The Forestry Experimental Station was included and was named the Forestry Division of the Central Research Institute. On the site of the Institute's original Taipei Nursery, the Taipei Botanical Garden was established. By the 28th year of the Republic of China (14th year of Emperor Showa, Japan; 1939), after restructuring of the Central Research Institute, the Forestry Division was recast as the independent Forestry Research Institute.

The 34th year of the Republic of China (1945) saw the retrocession of Taiwan after the defeat of Japan in World War II. The Taiwan Administrative Offices formally took over the Institute on November 1 of that year. It was then renamed the Taiwan Forestry Research Institute. In September 1949, the Institute was transferred from directly under the Taiwan Provincial Government to a subordinate Administration of Agriculture and Forestry. Upon taking over from Japan, there were 6 divisions, namely, forest biology, silviculture, management, utilization, chemistry, and wood pulp; 4 branch stations at Lienhuachih, Chungpu, Hengchun, and Taimalee; as well as a resin experimental post at Pashienshan. With subsequent restructuring and shifts in research needs, there are currently 10 divisions, i.e., forest biology, silviculture, forest economics, forest management, watershed management, forest protection, forest utilization, forestry chemistry, wood cellulose, and forestry extension; there are also 4 offices, i.e., the secretariat accounting, personnel, and ethics morality; as well as 6 branch stations at Fushan, Lienhuachih, Chungpu, Liouguei, Taimalee, and Hengchun.