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Link arrives at the Forest Haven in search of Farore's Pearl. The Great Deku Tree, who protects the Koroks who live there, promises to give Link the pearl once the annual Korok Ceremony, vital to the safety of the Koroks, has taken place. However, a Korok named Makar accidentally fell into the woods while flying over it, so the ceremony cannot take place. The Great Deku Tree decides that Link's arrival on the island was fated to happen. So, knowing that heroic deeds are expected of Link, he sends Link to the Forbidden Woods to rescue Makar.
One of the Koroks points out that Link cannot fly to the Forbidden Woods since he is too heavy, and he cannot sail to the entrance either. So, the Deku Tree grows a Deku Leaf on one of his crowns, which will allow Link to fly to the Forbidden Woods. Link utilizes several Baba Buds to reach the Deku Leaf and proceeds to the Forbidden Woods with the help of the "Wind's Requiem" and the Updrafts encircling the area.
At the end of the dungeon, Link finally locates Makar, but upon Link's arrival Makar is abruptly swallowed by the boss Kalle Demos. After Link defeats the enormous plant creature with his Boomerang, Makar is released from the beast. Makar feels guilty for flying over the Forbidden Woods after he learns that the Great Deku Tree sent Link to rescue him. Once the pair return to the Forest Haven, though, the Great Deku Tree forgives Makar since he is just glad that Makar is safe now.
As promised, the Great Deku Tree gives Farore's Pearl to Link. Link is also able to see the Korok's annual ceremony. Makar plays a song on his violin, and the other Koroks begin to sing as the Great Deku Tree releases seeds from its branches, which the Koroks will plant on islands across the Great Sea. After the ceremony, Link departs the Forest Haven and sets off to his next destination.
This dungeon is home to many monstrous plants and insects, including the boss, Kalle Demos. The only way in for a human is by flying over from the top of Forest Haven with the Deku Leaf with the wind blowing in its direction. Koroks can obviously fly in, but are forbidden (hence the name) by the Great Deku Tree. Baba Buds commonly grow in the dungeon and can be used to reach the many high ledges as well as to replenish magic. Some parts of the dungeon contains what looks like poisoned swamp water like the variety seen in Woodfall Temple in The Legend of Zelda: Majora's Mask, but the water is safe to swim in. Also, on many of the doors in this dungeon are these flowers that'll close up and become invulnerable if Link gets too close to them; to destroy them, Link needs to throw a Boko Nut or Bomb Flower at them, but later on, he can also use the Boomerang to dispatch one. Upon talking to various Koroks one of them says "We Koroks used to once live in the Forbidden Woods a very long time ago. If you see any very large stumps they might be ruined houses!" This leads to the speculation that the Forbidden Woods (or at least part of it) might have been part of the original Kokiri Forest.
Some believe the Forbidden Woods to be the Lost Woods, Kokiri Forest, or the remains of the Deku Tree from The Legend of Zelda: Ocarina of Time. This theory can be disputed by the fact that in Ocarina of Time, this general region was not on a mountain of any great size. However, the survival of the Kokiri/Koroks and the implication that the Great Deku Tree seen in Forest Haven may be the Deku Tree Sprout lends support to the possibility that the region did somehow survive the Great Flood. Some additional evidence to this theory is the Kokiri symbol seen on the doors in the Forbidden Woods, and the mentioning by one Korok that the Forbidden Woods were once the Koroks' home.
An 8-bit version of the Forbidden Woods appears as a square on the Great Sea Adventure Mode map. Interestingly, Manhandla appears as a boss in the scenario found in the Forbidden Woods square, which is likely a reference to Kalle Demos (as they are both plant monster bosses). As part of the Master Wind Waker DLC, the Forbidden Woods also appears on the Master Wind Waker DLC Adventure Map.