Named after the resinous wood of the agarwood (Aquilaria agallocha), Agalloch began as the creation of Haughm and keyboardist Shane Breyer.

It caught the attention of The End Records, who offered them a contract, resulting in the 1999 release of their debut full-length album, Pale Folklore.

Reworking several earlier demo tracks, the album featured less of a black metal influence, more neofolk elements and neoclassical interludes.

After a hiatus, the band released an EP of unreleased material from 1998 to 2001 titled Of Stone, Wind, and Pillor, revealing more neoclassical and experimental elements.

A nature-themed split 10" picture disc single with the Finnish band Nest was also released in 2004, showcasing a collaborative, neofolk effort by Agalloch on the A-side.

Double vinyl reissues of The Mantle and Pale Folklore were released in 2005 in limited wooden boxes, complete with new artwork for both albums, to commemorate the band's single live performance of 2005 at the Day of the Equinox music festival held in Toronto on October 14, 2005.

On August 4, 2008, Agalloch released a compilation album called The Demonstration Archive 1996–1998 on Licht von Dämmerung Arthouse, collecting material recorded between 1996 and 1998 including the From Which of This Oak and Promo 1998 demos and the then-unreleased Of Stone, Wind, and Pillor EP.

[7] A two-CD compilation album named The Compendium Archive 1996 – 2006 was released by Licht von Dämmerung Arthouse on March 20, 2010, limited to 250 copies.

"[10] A tour-only edition of Marrow of the Spirit was issued by Licht von Dämmerung/Profound Lore, including a CD, photo cards and a bonus 7" featuring two tracks: "Nihil Totem" and "The Weight of Darkness".

Also on May 16, Licht von Dämmerung Arthouse released a 7" vinyl single of album track "Alpha Serpentis (Unukalhai)", credited to Agalloch and Nathanaël Larochette and limited to 350 copies.

[1] They later announced two additional shows in 2023: one at McMenamins Crystal Ballroom in Portland, Oregon;[19][20] and another at Decibel Magazine Metal & Beer Fest in Denver, Colorado.

[25] Common themes in Agalloch's imagery and subject matter were the beauty of nature, winter, melancholy and allusions to ancestral paganism.

Don Anderson described Norse mythology as a major influence on the band and said that "heathen culture" was the main inspiration for frontman John Haughm in particular.

[27] In a 1999 Wicked World interview with Haughm and Walton, done by Dan Tobin,[28] the band members listed influences including Katatonia, Ulver, The 3rd and the Mortal, Swans and Godspeed You!

In another interview with the Metal Rules webzine, the band cited filmmakers such as Alejandro Jodorowsky, Jim Jarmusch and Ingmar Bergman as influences.

In another interview, John lists Bethlehem, Fields Of The Nephilim, Coil, Arvo Pärt, Death In June, Steve Reich, and Joy Division as influences.