Forest Hill was originally incorporated as a village in 1923, and later annexed by the City of Toronto in 1967, along with the Village of Swansea. The village was named after the summer home of John Wickson; previously it had been known as Spadina Heights (a name that continued to be applied to the neighbourhood into the twentieth century). Rather than electing a mayor as in a city, the leading municipal official was the reeve of the village.

Prior to World War II, Forest Hill's population was predominantly made up of wealthy Anglo-Protestants. During the 1940s and 1950s, many upwardly mobile Jews moved from the Spadina area of Toronto into Forest Hill. Forest Hill has many businesses catering to the Jewish community along Eglinton Avenue West. Today, Jews make up about half of the population of Forest Hill, according to the 2001 census^{[citation needed]}.

Its original boundaries were Bathurst Street to the west, Upper Canada College to the east, Eglinton Avenue to the north, and Lonsdale Road and a portion of Montclair Avenue to the south (the original boundaries of School Section 30). Neighbourhoods north of Eglinton are sometimes though not unanimously regarded as Forest Hill. In 1999 Robert Fulford compared Forest Hill to Rosedale, the other traditional home of Toronto's elite: "While Rosedale has remained stable for half a century, Forest Hill's prestige has been growing steadily. There's a key tonal difference in the architecture of the two places: where big Rosedale houses shout 'history,' big Forest Hill houses shout 'grandeur.' More than any other district in the central city, Forest Hill has become the site of spectacular new 'neo-traditional' homes built on a grand scale, usually with lawns to match."^{[1]   Taken from  http://en.wikipedia.org/wiki/Forest_Hill,_Toronto}