Reid was born in 1875, the youngest child of a Presbyterian family in the shipping trade; on his mother's side he could claim descent from Katherine Parr, wife of Henry VIII, a source of some wistful pride to the young Forrest. Educated at the Royal Belfast Academical Institution, he did not excel, but equally found that his studies provided little strain. The family had suffered a fall in circumstances as the father's shipping ventures had collapsed, so the young Forrest found that the family's middle class gentility was distinctly frayed at the edges, and although never poor, his upbringing was one of forced economies and the keeping up of appearances. Indeed, fear of social descent and a flickering snobbishness were to permeate many of his youthful characters in his writings. His father died when he was young, and his mother was a remote figure, who demonstrated little warmth. Reid's chief parental figure had been his beloved nurse Emma Holmes, who was forced to leave the family employ following the death of Reid's father in 1881. A decline in social fortunes had thus robbed Reid of the one source of affection and unqualified love.
A shy and sensitive child, Reid showed a penchant for play that involved collecting and make believe. But insularity did not mean passivity, and Reid showed a youthful disdain for middle class mercantile and Protestant values of probity and religious observance. The young Reid rejected the family's Christian conformity, instead opting for a code of spirituality and individualism based on the teachings of ancient Greece. This dislike of middle class rectitude, materialism and conformity was to prove a strong theme throughout his works.
Reid was apprenticed to the tea trade as a young man, but eventually went up to Cambridge. This did not lead to a blossoming of his literary talent as Reid was to describe his time at university as a "rather blank interlude". He returned to Belfast, and during the next forty years lived privately and unostentatiously in the east of the city. Reid corresponded widely however, and his novels established for him a reputation as a notable prose stylist.
The central theme throughout much of his works was boyhood and youth, and Reid himself noted his limitations of scope by pondering that some "arrested development" prevented him from fully realizing a world of only adult relationships. Nevertheless, his novels were rich in themes of dream landscapes, animism, paganism, magical transformation, loss and class decline.
Reid wrote 17 novels most of which focus on boyhood, adolescence and friendship, as does his autobiographical work Apostate (1926). The first Kingdom of Twilight (1904) was warmly supported by Henry James, but the second The Garden God (1905) was repudiated in an angry letter by James because of its homoerotic overtones. The Spring Song ( 1916) and Pirates of the Spring (1919) depicts childhood friendship and terrors in a pastoral setting, whilst At the Door of the Gate (1915) portrays class tensions and prejudices in Belfast, and a young man's resentment at the middle class pretensions of his struggling family. Peter Waring (1937) is a root and branch revision of the earlier Following Darkness (1912) which tells the story of a boy's unhappy development in the households of a cold schoolteacher father and his vulgar Belfast relations. Denis Bracknell (1947), another overhauling of an earlier work, also portrays a stern father heading a somewhat dysfunctional family, whilst the son is a paganistic Moon worshipper who rejects the claustrophobic values of his middle class family. Brian Westby tells the story of a reunited father and adolescent son, whilst Demophon (1927) is a coming of age story filled with beings from Greek mythology. Arguably Reid's best fiction can be found in the Tom Barber trilogy, comprising the novels Uncle Stephen (1931), The Retreat (1936), and Young Tom (1944), this last segment winning for Reid the James Tait Memorial prize. The trilogy explores myths and dreams through a boy's eyes at different stages of his life, but can also be read as a simple celebration of the vitality and imagination of youth, and a sense of connection with nature.
A powerful nostalgic yearning for youth, love, the pastoral and the certainties of the imagination fuelled Reid's writings. As Reid put it, the "primary impulse of the artist springs, I fancy, from discontent and his art is a kind of crying for Elysium".
Reid also wrote highly regarded critical studies of Yeats and Walter de la Mare, an examination of nineteenth century art, and many essays and short stories. His collection of original illustrations of English woodcut artists of the 1860s is held at the Ashmolean Museum. Many of his original manuscripts are also held in the Belfast, Ulster and Irish Studies of the Belfast Central Library.
Reid died at Warren Point, County Down in January 1947 and was buried in Dundonald cemetery, Knock, Belfast.