Historically, the Institute of Chemistry started as the Department of Agricultural Chemistry, which was established in 1910 under the College of Agriculture, University of the Philippines Los Baños. In 1973, the Department of Agricultural Chemistry became the Department of Chemistry under the then College of Science and Humanities, now College of Arts and Sciences. In 1983, following Executive Order No. 889, the UP Board of Regents approved the establishment of the Institute of Chemistry as one of the National Centers of Excellence in the basic sciences in UPLB. Since 2006, the Center for Higher Education (CHED) recognizes the Institute as the Center for Excellence in Chemistry.
Created out of the staff, physical facilities and programs of the then Department of Chemistry, the Institute was established in order to strengthen and expand both the academic and research programs in the basic and applied chemistry in the support of agricultural, industrial and rural development thrusts of the country. In view of this mandate, the Institute of Chemistry must pursue and develop programs that would produce highly trained manpower equipped with fundamental knowledge and sound understanding of chemical principles as well as a strong research orientation. At the same time, it must strengthen and expand its research capability in both basic and applied chemistry. Furthermore, it must intensify its extension activities to enhance the delivery of technical services and the transfer of relevant technologies.