The Troll Tree is where Trolls used to live in. After a Bergen discovered and ate a troll and became happy, they placed a cage around it before they stared to build Bergen Town. The key to the cage is held by Chef, so she could unlock it on Trollstice.
On the Trollstice that Prince Gristle would be able to eat his first Troll and to feel happiness for the first time, the Trolls, led by King Peppy escaped through the tunnels that they dug under their home and prison. Without the Trolls caring for the tree, - as they had created a new village - it began to wither and became lifeless; while the cage around it rusting away. After Poppy, Branch and the Snack Pack were able to help the Bergans understand that happiness has been in them all along, life returned to the tree as the Trolls began to live in it again. With the Bergens living beside them.