Olaf, King of Norway, fought with Æthelred the Unready against the Danes allegedly in what became the parish of St Olave’s, Southwark. He was canonised and the name was corrupted from St Olaf to Tooley.

The earliest historical mention of the church dates back to the Domesday Book of 1086, which included a reference to the church in the Southwark area. This church was located slightly to the east of the London Bridge at that time. The church was demolished in 1926 to make way for the headquarters of the Hay’s Wharf Company, known as "St Olaf House." The construction of St Olaf House took place between 1929 and 1931 and was designed in the Art Deco architectural style by Harry Stuart Goodhart-Rendel (1887–1959). The building features a legend and a mural depicting Saint Olaf.

A devastating two-day fire started on 22 June 1861 during a period when the fire "brigade," officially known as the London Fire Engine Establishment, was under the management of insurance companies. This destructive fire began in a warehouse located at Cotton’s Wharf on Tooley Street. It took approximately two weeks for the fire to be completely extinguished. James Braidwood, the head of the Establishment, lost his life when a wall collapsed on him while he was combating the flames. This fire ranked among the largest and most destructive fires to engulf London during the 19th century.

In the aftermath of this catastrophic event, insurance companies responded by raising their premiums and even considering disbanding the fire brigade altogether. Eventually, the government stepped in to address the situation. The Metropolitan Fire Brigade Act was passed in 1865, resulting in the establishment of a publicly funded fire service, marking the birth of the first true London fire brigade.

Thornton Street was absorbed into Tooley Street in 1887.

During the early 1930s, George Orwell embarked on a unique journey, immersing himself in the life of a homeless person to gain first-hand insight into poverty. Along the way, he formed a friendship with a man named Ginger while working in the hop fields of Kent. Together, they eventually found shelter at a "kip," which is a doss-house or a place where homeless individuals could spend the night, located on Tooley Street. Their stay at the kip lasted from 19 September until 8 October 1931.

Orwell diligently documented his experiences during this period, making rough notes while staying at the kip. Later, he moved further down Tooley Street to the Bermondsey Library, where he transformed these notes into the book "Down and Out in Paris and London." The original library building no longer stands, as it was demolished in the 1980s. Today, the site has been transformed into an open space known as Potter’s Fields.

The end of the street does not reach the junction of Borough High Street, as is commonly assumed. In reality, this section of the road is known as Duke Street Hill. Tooley Street connects with Montague Close under the arch of London Bridge, situated slightly to the north of the junction with Borough High Street.