The location of the viticultural area is in the same general region as the 1844 La Estrella Land Grant, which was made by the Mexican governor to the Salinan Indians who resided in the Mission San Miguel locale.

The northeastern portion of the boundary extends diagonally southeast from the San Luis Obispo County line at Ranchito Canyon to Shedd Canyon on the Estrella River following straight lines between peaks in the Temblor Range that roughly separate the viticultural area from the steeper and more arid terrain to the east not included in any of the proposed viticultural areas named in the petitions.

California’s rich history began with Spanish and Mexican governments creating concessions through land grants from the late 1700s to mid-1800s.

The first record of the name "Estrella" applying to the area east and northeast of what is now downtown City of Paso Robles appeared on the diseño of Mission San Miguel in the 1840s.

George H. Derby, in 1852, wrote: "The peculiarity of the divergence of these four valleys, and their corresponding ridges from this point resembling the rays of a star, has given its very appropriate name – Estrella.

It isn’t known who deserves credit for discovering that all of this land belonged to the government and was open for settlement, but a migration of settlers began during the 1870s.

Raising crops or large herds of cattle or sheep was meaningless as long as it remained difficult – in fact nearly impossible – to get products to San Francisco and Los Angeles markets.

A series of northeast-to-southwest canyons with intermittent streams and long, narrow valley floors dominate much of the northern and eastern terrain, with elevations ranging from 1,100 to 1,600 ft (335–488 m).

Maritime sea breezes enter the region through the Templeton Gap and other low spots in the crest of the Santa Lucia Range to the west; occasional sea breezes flowing from Monterey Bay southward along the Salinas River Valley also provide marine influences.

As a result, the Estrella River watershed incurs year-round winds, predominantly from the west, that blow through its connecting valleys and canyons.

In addition, sea breezes occasionally travel south from Monterey Bay via the Salinas River valley to the viticultural area.

The viticultural area’s temperatures are also influenced by night-time cold air drainage from the higher slopes of the surrounding Santa Lucia Range, Temblor Range, and Huerhuero Hills; this cold air drainage occasionally results in early morning fog within the viticultural area during the summer.

The combination of the region’s climate with its deep alluvial, mostly terrace soils (some of which are partially cemented by clays, iron, silicates and carbonates) creates moderate vigor vineyards.

In 1988, J. Lohr Winery expanded into Paso Robles to focus on Cabernet Sauvignon, Merlot, Syrah and other red varietals.

Today, Paso Robles Estrella District cultivates approximately 8,500 acres (3,400 ha) on 35 vineyards and at least 14 bonded wineries.