The word TOLHUIN derives from two words: tol- wen in Sellknam language. The Selknam were the aborigines who lived in this area, and the term means "similar to a heart", or "like a heart". That is the reason why the place is now called "Corazòn de la isla", which means "the heart of the island".
Tolhuin was founded on the 9th October 1972 by Territorial Law Nº 31 during the presidence of Alejandro Agustín Lanusse, being Gregorio Lloret the governor and Néstor Nogar the intendent of Rio Grande. All of them were present when they set the fundamental stone in the intersection of the streets Lucas Bridges and Luis Cárdenas.
In the same year, the first 20 houses and the primary school were built. On 5th September 1982, the first municipal delegate was appointed, when the city had a population of some 250 inhabitants.
In 1991, it was declared a commune, being the first communal council elected on 11th December of the same year.At that moment the population reached 442 inhabitants according to the national census. When Provincial Law Nº 231 was passed in June 1995, the Town Hall and the Council were created. At present there are some 1200 inhabitants.