Visitors to therapeutic forests for health are rapidly increasing. Few studies, however, have been conducted to find out how such increasing number of visitors influence therapeutic effects of the forests. This study examines the influence of encounter numbers on perceived crowding (PC), visitors' psychological and physiological states. Thirty-two college students participated in the laboratory experiment conducted during April, 2014. Two sets of simulated photographs were used as stimuli: 12 for high and 12 for low encounter level. The results showed that (1) encounter level influenced PC and psychological states. PC was higher when encounter level was higher. Subjects' psychological states (Perceived environmental restorativeness: PER, Profile of mood states: POMS, Emotional states: ES) were also related with encounter level. ES and POMS increased and PER decreased as encounter level increased. Cortisol level, however, was not related with encounter level. (2) Correlation analysis also showed that PC and all psychological indicators (i.e., ES, POMS, PER) besides level of cortisol were correlated each other. The results of psychological tests imply the necessity of managing encounter level to enhance the therapeutic effects of forest. More studies on the unexpected findings for the physiological response (i.e., cortisol level) are required.