Objectives This study investigated the association between the decline of the decayed, missing, and filled teeth (DMFT) index and several family‐level and individual‐level factors among 6‐ to 18‐year‐old Taiwanese children from 2012 to 2020. Methods This study used data from the 2012 and 2020 Taiwan National Oral Health Survey of Children and Adolescents. Both surveys used similar methods and were performed in the same study age group. A structured questionnaire was used to collect data on parents' sociodemographic background; the number of children in the family; oral health‐related knowledge, attitudes, and behaviours; and children's dietary habits. Dental caries was recorded through standardized oral examinations. Multivariable multilevel zero‐inflated negative binomial regression models were used to determine the association between family‐level and individual‐level factors and the DMFT index from 2012 to 2020. Results A total of 10 217 and 10 436 schoolchildren completed the oral examinations and questionnaires in the 2012 and 2020 surveys, respectively. The adjusted mean DMFT index of 12‐year‐old Taiwanese schoolchildren in 2020 was 2.01, denoting a significant decline from 2.50 in 2012 (adjusted mean ratio = 0.20, 95% confidence interval [CI] = 0.17, 0.23, p < .0001). Furthermore, children who often consumed sugar‐rich drinks had a significantly higher risk (mean ratio = 1.05, 95% CI = 1.01, 1.10) of having DMFT than those who seldom consumed such drinks (p = .017). Conclusions In the period of 2012–2020, the DMFT index among Taiwanese children significantly declined. Children who often consumed sugar‐rich drinks had a higher DMFT index than those who seldom consumed such drinks. Our findings are valuable to paediatricians, dentists, nutritionists, and public health policymakers.