The Justice Ministry's Agency of Corrections issued a statement saying Chen, who is serving a 20-year jail term for corruption and money laundering, was in a hospital affiliated with Taichung Prison when he attempted suicide.
Chen, who was president between 2000-08, tried to hang himself with a towel from a faucet in a corner of his bathroom out of view of surveillance cameras, China News Agency reported.
Prison guards went to check on Chen and stopped his attempt, CNA said.
Chen, 63, reportedly told prison staff he wanted to take his life because of problems he was having trying to rejoin the Democratic Progressive Party.
After a three-year court battle, a district court sentenced Chen and his wife Wu Su-chen to life in prison in September 2009.
They were found guilty in four corruption cases, including misuse of special state funds and taking bribes in a land deal.
Chen had said the bribes were actually political donations. He also maintained the charges were politically motivated because his party had favored Taiwan's independence from China, which has always asserted its sovereign claims on the island nation.
But in June 2010 a high court reduced the life sentences for Chen and his wife to 20 years.
The court also reduced fines on Chen and his wife from $15.5 million to $11.4 million, CNA reported at the time.
After he lost the election in 2008, Chen resigned from the party.
At the time of his resignation, China Daily reported a DPP spokesperson said Chen would not be allowed back into the party for five years.
Prison officials have arranged for Chen to visit a psychologist and also allowed him to plant seeds in a garden to improve his mental state, CNA said this week.
DPP legislator Ker Chien-ming said the party would decide next week whether Chen is allowed to regain his membership.
Chen's election in 2000 ended more than 50 years of Kuomintang party control of the government in Taiwan, which mainland China insists is part of the communist state.
Chen won the 2000 presidential election with 39 percent of the vote, thanks to a split within the Kuomintang. He was re-elected in 2004 by a narrow margin after surviving a shooting while campaigning a day before voting.
The DPP lost the 2008 election to the Kuomintang led by Ma Ying-jeou who won with 58 percent of the vote. Ma defeated defeated DPP candidate Frank Hsieh.
Ma won again in January last year, but with nearly 52 percent of the popular vote. He beat DPP challenger Tsai Ing-wen who resigned as chairperson of the party.