Garry and Julie Hounsell established Toolangi in 1995 on a former cattle grazing property next to the Toolangi State Forest. They produced their first vintage five years later. In 2017 Rochford owner Helmut Konecsny acquired the business.

Toolangi makes their wines principally from estate grown fruit, supplementing it when needed with grapes from other Yarra Valley growers. The Toolangi vineyard lies on well drained, north-east facing slopes. At the winery they put their fruit into the hands of an acclaimed winemaker for the varietal. Toolangi's winemakers have included Rick Kinzbrunner (Giaconda), David Bicknell (Oakridge), Franco D'Anna (Hoddles Creek Estate) and Willy Lunn (Yering Station).

Toolangi produces outstanding examples of the signature Yarra Valley varieties Chardonnay and Pinot Noir. They release each at all three tiers of their range – Toolangi Reserve, Toolangi Estate and Toolangi.