It was recognized by the Bureau of Alcohol, Tobacco and Firearms {ATF}, Treasury on June 15, 1992 after reviewing the petition from Mr. Barry Jackson of the Harmony Wine Company proposing a viticultural area to be known as "Santa Lucia Highlands.

The region enjoys cool morning fog and breezes from Monterey Bay followed by warm afternoons thanks to direct southern exposures to the sun.

[1][7] In 2021, the Alcohol and Tobacco Tax and Trade Bureau (TTB), Treasury ruled on a modification of the shared Santa Lucia Highlands-Arroyo Seco AVA boundary.

[3] The following factors differentiate Santa Lucia Highlands from the adjacent Salinas Valley floor and other viticultural areas in Monterey County: (1) A well defined alluvial terrace running the length of the eastern boundary; (2) Generally cooler microclimate: cool Region I/II vs.

Region I/III; (3) Different soil types: gravelly, sandy loam vs. silty clay loam; (4) Higher elevation: initially 40 to 120 ft (12–37 m) higher than the valley floor and climbing to 1,200 ft (366 m) above the valley floor; (5) Climate: less wind and earlier fog burn-off with morning sun and; (6) East facing slopes receiving morning sun first.

This earlier bum-off results in greater light intensity for a longer period for vineyards located in the highlands.

Wind speeds average 5 to 16 mi (8–26 km) per hour, but higher velocities are not uncommon, particularly around Soledad where the valley narrows.

These are well-drained soils formed from granitic alluvium, and in the case of the Chualar series, some schistose rocks on alluvial fans and terraces.

Included in the alluvial fans and terraces are small areas of Placentia, Rincon, Tujunga, Lockwood, Gorgonio, and Hanford soils.