Mindanao State University at Naawan was founded as a field laboratory of the MSU College of Fisheries under Dean Domiciano Kapili Villaluz in 1964.

Through the help of the Municipal government, a 15 hectare mangrove area in Naawan, Misamis Oriental was acquired for training students in the design and construction of brackishwater ponds for the culture of commercially important species of fish.

At the same time, a handful of biologists under the leadership of Dean Villaluz was experimenting on the hatchery technique of producing the fry of Penaeus monodon Fabricius under laboratory conditions, the first in the world.

Villaluz successful convinced the National Science Development Board (NSDB) of the bright prospect of prawn culture in the country.

This led to the NSDB assistance of P37,000/year for three years to research project entitled "Reproduction, Larval Development and Cultivation of Sugpo, P. monodon Fab.

This first documented successful experiment on prawn culture inspired other institutions and private investors in recent years to put up, commercial hatcheries and provided bright prospect for a new dollar-earning aquaculture industry.

The MSU-Institute of Fisheries Research and Development was formally organized and made a distinct unit of the Mindanao State University pursuant to a special order signed by then President Mauyag Tamano on December 4, 1973 placing the MSU Naawan Fisheries High School under its immediate supervision.

This was the assessment of a study team composed of professors from the UP College of Fisheries at Diliman, and of representatives from the Ministry of Education, Culture, and Sports (MECS) when they toured the IFRD Campus in 1985 and 1986.