The Tool Shed was opened in 2004 at 804 E. Center Street in Milwaukee, by founder Eilis O'Herlihy along with co-owner Andy Penasa. From its founding it was a mission-driven, education-based sex toy store. More than your typical adult store, the store's staff provide quality, non-toxic and body-safe products that enhance the sexual lives and relationships of their customers, all in a comfortable, compassionate, and welcoming atmosphere.

The Tool Shed is a place where people of all genders and sexual orientations can explore their sexuality in a positive environment and be treated with respect by a friendly and knowledgeable staff. The store's team knows a lot about the toys and equipment they sell, and the store frequently offers workshops and other events where customers can learn more about a variety of sexuality and relationship topics.

In 2008, the store was sold to a new owner, Laura Anne Stuart. Later that same year, the store was relocated to 2427 N. Murray Ave. in Milwaukee, where it has remained since.

The store's website in early 2023 describes the history of the store:

During the fall of 2003, an idea was born... How's about opening a sex-positive sex toy store in Milwaukee with a comfortable atmosphere? The gals that opened the Tool Shed felt that their city was in desperate need of a place that not only epitomized their beliefs about what a sex-positive, gender-positive, healthy and inviting sex toy store should be, but they also really wanted to educate and empower people by breaking taboos around talking honestly about sex and sexuality. In 2004, after over a year of preparation, the Tool Shed's doors opened in Milwaukee's Riverwest neighborhood.

In July of 2008, the reins of the Tool Shed were passed to Laura Anne Haave. Laura has been a sexuality educator, sexual violence survivor advocate, and LGBTQA activist for more than twenty years. She has a master’s degree in health behavior and health education. In addition to her work at the Tool Shed, Laura is a teacher, trainer, and curriculum developer for Our Whole Lives (OWL), a comprehensive sexuality education curricula. She also authored a weekly a sex advice column called "Sexpress" for Milwaukee’s local free weekly paper, the Shepherd Express, for five years.

Since 2008, the Tool Shed has gone through a lot of exciting changes. We moved from our original storefront in Riverwest to a larger, wheelchair accessible location on Milwaukee's East Side. We have grown our product selection to over 3,500 different items sourced from over one hundred unique manufacturers and suppliers. Our extensive book selection contains over 450 titles. Our ongoing events series has offered classes and workshops by some of today's leading sexuality experts, including Jiz Lee, Joan Price, Reid Mihalko, Twanna Hines, Robin Mandell, Buck Angel, Midori, Lee Harrington, Madison Young, Tristan Taormino, Dan Savage, Sinclair Sexsmith, Ducky Doolittle, Dr. Ruth Neustifter, Helen Boyd, and others. And in April 2016, we hosted Milwaukee SHARE, a week-long series of community events focused on adult sex education and healthy relationships, including a day-long special conference for health care providers.

The Tool Shed has been voted Milwaukee's Best Adult Retail Store from 2010-2018, and was named the Best Adult Boutique in the nation by AVN in 2014.