It was formally founded in 1975 by Dongchu, a scholar monk and disciple of renowned Chinese Buddhist master Taixu.

Dongchu bought the 2.5 acres (10,000 m2) land at Guandu Plain near Taipei in the end of the 1960s.

Dongchu finally began to build a two-story farmhouse that still existed today behind the main hall.

The local authorities allowed this arrangement as the district was only marginally populated at the time.

Sheng-yen was in United States by the time, he was just being elected abbot of a small monastery in Bronx, New York called Temple of Great Enlightenment.

Sheng-yen's earliest Taiwanese disciples were devotees and monks in Nung Chan.

Throughout the 1980s it continued to expand with temporary buildings as Master Sheng-yen's reputation grew, which led to less tolerance from the authorities on the zoning issues.

Its capacity became quite overwhelmed by the late 1980s and finally the organization decided to buy a declining temple and new plot of land in the mountainous area of Jinshan, Taipei in 1989 and build a new center known as the Dharma Drum Mountain (DDM), which would become the name for all of Sheng-yen's institutions.