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In 1978 Allandale Winery was built near the site of what was one of the largest wineries in the Hunter Valley in the 1890s, also called Allandale. The 1890's Allandale winery had a capacity of 518,000 gallons (2.35 million litres) and included some fine stocks of claret and hock. In 1891 Allandale was awarded the champion medal for NSW, and by that time had received over 70 awards in exhibitions around the world. It was technologically advanced for the time; it boasted a machine used for the purpose of immediately separating the stalks from the fruit before finding its way into the presses; a steam engine was used for driving the crusher and cleaning casks and centrifugal pumps were used for racking the wine. Historical records are scarce on who owned and operated the old Allandale winery and why it all ended in the late 1920s. The Great Depression that started about 1929 was a likely contribution to its downfall.

With the growth of the wine industry and tourism in the Hunter Valley in the 1970s, a group of friends including Allandale's first winemaker Ed Jouault, purchased 30 acres of land in the Lower Hunter Valley wine growing area in what was then known as Allandale, now Lovedale. The winery/ cellar door was built on the hill which overlooks 17 acres of plantings of Semillon, Chardonnay and Pinot Noir, and captures the panoramic views over the Lower Hunter and Brokenback Mountain ranges.

Among the original shareholders were Wally and Judith Atallah who over the life of the winery have gone on to become the major shareholders in the winery. Their persistence and direction have contributed substantially to the winery's success.

Allandale wines first came into prominence when the 1980 Allandale Chardonnay won the Farmer Brothers Trophy at the 1981 Canberra National Wine Show. The continuing success of the early Chardonnays was a sign of things to come as Allandale has built a reputation over 3 decades as one of Australia's premium Chardonnay producers.

Alongside Chardonnay, Allandale has also built an enviable reputation over the years for producing some of Australia's finest Semillon, often taking the trophy at respected wine shows around the country and regularly appearing in Winestate Magazine's Top 40 Wines in Australia.