It was recognized by the Bureau of Alcohol, Tobacco and Firearms (ATF) effective on July 14, 1982 after reviewing the petition submitted by the Gavilan Vineyards, Inc. to establish a viticultural area in Monterey and San Benito counties to be named "The Pinnacles."

In the final ruling, ATF believed that sufficient evidence was submitted which established historical and current use of the name “Chalone” for the viticultural area.

In 1919, French immigrant and entrepreneur, Charles L. Tamm, traveled through California searching for the terroir with limestone soil similar to his native Burgundy.

On the north slope of Chalone Peak at 1,800 feet (550 m), Tamm planted Chenin Blanc sourcing for wineries during Prohibition, when the grapes were used to make sacramental wines.

Strong winds off Monterey Bay and the arid climate of the Salinas River Valley deterred the planting of wine grapes.

[8] The viticultural area, as amended, consists of 8,640 acres (14 sq mi) of rolling land located on a geological bench in the Gabilan (or Gavilan) Mountain Range of Central California.

The boundaries are as follows: to the south and west, the points at which the land drops off sharply to the Salinas Valley: to the north, the ridge line (watershed divide) effectively dividing Monterey and San Benito Counties, and the Gloria Valley on the other side, and, to the east, the western boundary of the Pinnacles National Monument.

[1] The climate of the Salinas Valley is tempered by the cooling winds from Monterey Bay which form a thick fog layer that extends to an elevation of 1,000 feet (305 m).

In summer the viticultural area is approximately 10 °F (−12 °C) warmer than the Salinas Valley because the former does not receive the cooling winds and fog cover from Monterey Bay.