Thompson Island, at the southwest tip of Key West, was selected as the site for the fort in 1822 and plans drawn up by Simon Bernard and Joseph G. Totten were approved in 1836.

The fort was named for United States President Zachary Taylor in November 1850, a few months after his sudden death in office.

This resulted in an influx of enslaved peoples into the immediate area as, before the construction of the fort, there were no large agricultural ventures and thus not a high demand for slaves, marine salvage being the main industry.

Its 5-foot (1.5 m) thick walls rose 50 feet (15 m) above mean low water and included two tiers of casemates with a terreplein or barbette at the top.

Due to the filling in of land around the fort, including the creation of an attractive stretch of beach, the park now occupies 87 acres (35 ha).

President Harry S. Truman used Naval Station Key West as his Winter White House for a total of 175 days over 11 visits.

Those buildings in the Truman Annex and associated real estate not retained by the Navy as part of NAS Key West were sold to private developers.

A museum for the Truman White House was built and the Navy continues to own and maintain the piers and that portion of the former Naval Station Key West property to the North of Fort Taylor, which it uses primarily to support of Joint Interagency Task Force South (JIATF-S).