Taroko began as coral deposits, compressed beneath an ancient sea and transformed by aeons of geology into limestone and then marble, schists and gneiss. Some five million years ago, Taiwan started lifting from the sea as the Philippine and Eurasian plates collided. Water erosion then carved out softer deposits to leave the towering canyon walls of harder rock.

Humans are known to have inhabited the park as long as 3000 years ago. However, the ancestors of today's Truku (Taroko) indigenous tribe only began to settle along the Liwu River in the 17th century. The Truku were known for their hunting and weaving skills, the use of facial tattoos, and ritual headhunting.

The tribe lived in isolation until 1874 when the Qing began to build a road from Suao to Hualien to help open the area to Chinese settlers. In 1896 the Japanese marched in looking to exploit the forestry and mineral resources. After a bloody 18-year struggle, they finally forced the outnumbered and out-weaponed Truku to submit, and most villages were relocated to the foothills or plains of Hualien.

The Japanese built roads and widened existing trails (using Truku labour) to form the 'Old Hehuan Mountain Rd' from the base of the gorge to Wushe in Nantou County. The road facilitated control over mountain tribes and the extraction of the area's natural resources. It also spurred the first wave of tourism in the area, with hiking becoming a popular activity by the mid-1930s.

In the 1950s the KMT extended the road west as part of the first cross-island highway. Many of the road workers later settled in the area, often marrying Truku women and becoming farmers.

As with Yushan National Park, plans to turn the Taroko area into a national park surfaced in the 1930s. WWII initially scuttled that idea and it was not until the 1960s that the KMT government began to draft a national park act. The park was officially established on 28 November 1986.