Founded in the early 19th century as a result of the land-grant Illinois Central Railroad's expansion southward, Tolono was initially home to many railroad employees. Many streets bear the names of the IC's administrative staff. The original homes in the community were small and narrow filling half lots adjacent to the railroad tracks. With the intersection of an east-west railway, Tolono became a featured stop for early rail passengers. The peak of the railroad's passenger influence in Tolono occurred when Tolono became the last stop in Illinois for Abraham Lincoln as he bid farewell to his home state in a speech given from the back of his coach.