[3] Hakea teretifolia was first collected at Botany Bay in April 1770, by Sir Joseph Banks and Daniel Solander, naturalists on the British vessel HMS Endeavour during Lieutenant (later Captain) James Cook's first voyage to the Pacific Ocean.

[4] Richard Salisbury described the species in his book Prodromus stirpium in horto ad Chapel Allerton vigentium in 1796 and gave it the name Banksia teretifolia.

[3] In 1990, Robyn Mary Barker described two subspecies of H. teretifolia in the Journal of the Adelaide Botanic Gardens, and the names are accepted by the Australian Plant Census:[19] Hakea teretifolia grows on damp or wet low-nutrient soil,[21] in sandstone soil-based heathland, and can form dense thickets with the heath banksia (Banksia ericifolia) and scrub she-oak (Allocasuarina distyla).

It grows in moist to wet locations in heath and woodlands east of Melbourne and a disjunct population in the Grampians.

When planted in clumps, this species provides an excellent shelter for small birds such as superb fairywrens (Malurus superbus) and the smaller sized honeyeaters.