The Tolbooth was built between 1616 and 1629 by Thomas Watson, a master mason from Old Rayne. The Wardhouse of the Tolbooth was the prison for both the Royal Burgh of Aberdeen and Aberdeenshire until the 19th century.

Over the centuries The Tolbooth has witnessed, and often played a part in, some of the key events in Aberdeen's and Scotland's history. During the 1745 Jacobite rebellion, when the Duke of Cumberland stayed in Aberdeen in order to put down the rebellion here before leaving for Culloden, he posted troops on the steeple of The Tolbooth to watch out for rebels and very visibly display the reasserting of royal authority. After the rebels had been defeated at Culloden hundreds of rebel prisoners were brought back to The Tolbooth where they were interrogated. In the mid-18th century The Tolbooth was one of the many places associated with one of the darkest episodes of Aberdeen's history. A number of Aberdeen's merchants and magistrates organised the kidnapping of hundreds of children from both the town and countryside. These children were then stored in various places, including The Tolbooth, before being transported to the Americas and sold as indentured servants.

The Tolbooth stopped being used as a prison in the 19th century and was replaced by Aberdeen's first 'modern' prison, the Bridewell, built on what we now call Rose Street. The Tolbooth remained in use during the time the Bridewell was opened and after, when the Bridewell was replaced by the East Prison on Lodge Walk, as a holding prison. The Tolbooth survived when the new Townhouse was laid out. The front of The Tolbooth was encased in granite, but the rear of the building still shows its original sandstone with its 17th century battlements.