Forsyth was incorporated and listed as the county seat of Monroe County, on December 10, 1823. Forsyth was named in honor of John Forsyth, who, as minister to Spain, negotiated the purchase of Florida in 1819.

One of the main attractions to the city is the Forsyth Commercial Historic District. This historical area includes the Courthouse Square and surrounding blocks of structures from the mid-to-late 1800s. Many of the structures are listed on the National Register of Historic Places. This is also the site of the annual Forsythia Festival in the spring.