The establishment YTAR originated from Utusan Melayu’s (now Utusan Malaysia) vision in 1966. Datuk Muhammad bin Jamil proposed to set up an education fund to Tan Sri Melan bin Abdullah; the Editor-in-Chief of Utusan Melayu then.

The main purpose of its establishment is to help Malay students who cannot afford to pursue higher education. The establishment of this education fund is also to commemorate the great invaluable deeds of YTM Tunku Abdul Rahman Putra Al-Haj; as the Father of Independence, the first Prime Minister of Malaysia, and the Father of Malaysia.

Thus, in conjunction with the 63rd anniversary of YTM Tunku Abdul Rahman on 8 February 1966, Utusan Melayu launched a donation drive campaign for the fund. The campaign received a very positive response from all walks of life, members of UMNO, state governments, companies, associations, and individuals.

During a meeting between YTM Tunku Abdul Rahman and Utusan Malaysia, YTM Tunku Abdul Rahman agreed on the setting up of the fund; at the same time he saw the need for its establishment to be turned into a national institution, not just a body that raises funds to accommodate the needs of poor Malay students.

In conjunction with the approval of a bill; Act No.43, 1966 under Tunku Abdul Rahman Foundation Act which was approved by the Parliament on 15 July of the same year, the federal government announce the establishment of YTAR. Its status remained as Non-Government Organization, NGO.

Although the main objective of YTAR initially was to finance Malay students studying in the field of science and technology, because of the Foundation’s financial contributions come from all walks of Malaysia’s multi-racial society, its objective is expanded. Therefore the assistance and scholarships of YTAR are open to Malaysian students of various races.

YTAR appointed YAB Tan Sri Mohd Khir Johari as its first Chairman in view of his goodwill and reputation. On 16 April 1974, the federal government decided that Minister of Education as YTAR Chairman. With effect from 27 March 2004 until now, the position of Chairman succeeded by Minister of Higher Education in conjunction with the establishment of the said ministry that year.

According to the act, YTAR is administered by a Board of Trustee with the members as follows:

• A chairman duly appointed by DYMM Seri Paduka baginda Yang Di-Pertuan Agong;
• A respresentative from Ministry of Higher Education;

• A representative from Treasury;

• Six members duly appointed by the Minister of Higher Education.