Alaguali lands bordered the north edge of San Pablo Bay and the southern one third of their area was low tidal marshland at the mouth of Sonoma Creek and Napa Slough.

[3] Padre José Altimira, the founder of Mission San Francisco Solano, wrote in his diary on June 27, 1823, "Tolay Lake so called for the Chief of the Indians".

It originates near Stage Gulch Road (part of State Route 116) about 2 mi (3 km) north of Lakeville, California.

It parallels State Route 121 southward to State Route 37 at Sears Point, California, feeds into the Napa Sonoma Marsh, and enters San Pablo Bay west of Tubbs Island in the San Pablo Bay National Wildlife Refuge.

South of State Route 37, Tolay Creek marks part of the western boundary of the Sonoma Valley AVA, a federally designated wine appellation.