The railway to the town was opened in 1891 and closed in 1957, as a branch line from Birregurra. It serviced the townships of Deans Marsh, Murroon, Barwon Downs, Yaugher and Forrest. At Forrest numerous tramways ran off into the nearby bush. These lines were used to bring the freshly cut timber to the rail head, and the associated sawmills of which there were 4 in Forrest and nearby Yaugher. All of these mills are now closed. Originally called Yaugher, the name was changed to Forrest when the township was established. The Post Office opened as Yaugher on 27 July 1891 and was renamed Forrest a few weeks later on 15 October 1891. The town football team was established in 1891 and competed in the Colac & District Football League until 2015, eventually folding after struggling to field netball and junior football teams due to lack of available players in the district.
Today
Consisting of a microbrewery, upmarket restaurant, "pub", general store, bike hire cafe, guesthouse, and a variety of accommodation rentals, Forrest is the gateway to the Otway Ranges. It is fast becoming a hub for foodies and adventure tourists, which is now the primary economic driver of the town. The West Barwon river flows through the township and it is near the West Barwon reservoir, which services Geelong. During the past few years the town has begun to grow again with an influx of people seeking more affordable blocks of land not that far away from the coastal resorts of Apollo Bay, Skenes Creek, Grey River, Kennett River and Lorne. These can be reached either by a pleasant drive on a sealed main road or by ex-timber blue metal roads. Advice should be sought before motoring on the backroads to Kennett River, Wye River and Grey River. Fauna to be viewed on these drives include Australian king parrots, crimson rosellas, grey swamp wallabies, echidnas. Koalas have in the past been released into the Otways. The Smith Street Band recorded their third album Throw Me in the River in Forrest in July 2014.
After the cessation of logging in the Otways, the Government of Victoria made funds available for the creation of dedicated Mountain bike trails in the Yaugher area, in order to replace the logging industry. Mountain biking was seen as an addition to the already plentiful eco-tourism industry. Mountain biking now makes up a large portion of the economy in Forrest. The area now has over of sign posted "single track". Further details can be found at the official website Forrest is home to the following annual Mountain Bike Events
