Tolleston was platted in 1857 by George Tolle. The Tolleston post office was established in 1860, and a Lutheran church in 1868; by 1870 the town contained approximately 80 families. The early population consisted chiefly of German immigrant farmers and railroad workers. In the late 19th century, sand mining and ice harvesting became the chief local industries. Prior to the founding of Gary in 1906, it was the principal settlement in the region, and Tolleston's Gibson Hotel was used as a base by the officials of US Steel planning the new city.
Tolleston was incorporated as an independent town on September 4, 1906, to prevent annexation by Gary. It was annexed nonetheless in 1910, as a byproduct of an annexation dispute between East Chicago and Gary. As a neighborhood of Gary, it was exclusively white until the early 1950s, when legal segregation in Gary ended; it was almost entirely African-American by 1985. https://en.wikipedia.org/wiki/Tolleston