Lerwick's Old Tolbooth at 32 Commercial Street, was built by the Commissioners of Supply in 1767 after achieving the approval of Lord Morton. The later much-altered building is the second tolbooth on the site, the original building on the site having been constructed between 1660 and 1670. Funds came from a wide range of local sources including ship-wrecks and contributions by private organisations such as the Morton Masonic Lodge.
Originally the Tolbooth had an enclosed yard at the back, in 1772 a steeple was added which kept neither a bell nor a clock but both items were added later when the former ship's bell of the Drottningen av Swerige was no longer used as a church bell. The steeple with bell and clock was removed again in 1927.
Changes of the internal structure of the building were due to various functions the building served over the time. The top floor originally held one big room and two small prison cells. The big room was used for public functions including balls and Masonic meetings of the Morton Masonic Lodge which got such rights in return for her contributions to the building costs.
Beneath there were two big rooms, one serving as court-room the other as a schoolroom. This schoolroom was altered into a permanent sheriff-clerk's office around 1825.
Within the basement there were two more prison cells but the jail failed its inspection in 1836 and since then the cells were only used as a lock-up for arrests. In the second half of the 19th century they were known as "Nicol's Hotel," named after a Sergeant Nicol, an old soldier who ran the "hotel".
After the new Lerwick police station was finished the building became a post-office in 1878 and a "Fisherman's Institute" and the first Lerwick base of the Royal National Mission to Deep Sea Fishermen in 1912 following a thorough renovation. They moved out in 1962, following which the Zetland County Council purchased the building for use as a Civil Defence Headquarters. For five years from 1964 it served as a hall venue for Up Helly-Aa, then in 1968 it was sub-let to the British Red Cross, The W.R.V.S and the Shetland Tourist Association.
A two storey flat roofed extension was built on the back of the Tolbooth at some time prior to 1890, part of which housed the Hoversta Dairy for a time, and another part the barber shop of Mr. R. Paton, the latter becoming the Lerwick Old People's Welfare Committee Rest Room.
The building was condemned in 1999, but following a comprehensive renovation, which included the demolition of the later added two story flat roofed extension on the back, carried out by local D.I.T.T. Construction Ltd. between 2003 and 2005 the Old Tolbooth today houses Britain's busiest lifeboat shore station. During renovation the building was completely stripped down to the original stonework before it was rebuilt to meet the modern demands. Finally it was plastered in the traditional lime wash technique and an authenticly reconstructed clock tower was again placed on top of the roof.
With regard to the various functions and the commanding view of the building we must not wonder that many travellers in bygone Shetland referred to the building as Lerwick's town-house (Low, 1774), the stadshuset (Danish whalers and Swedish Eastindiamen of the 18th/19th), or the old town hall (R L Stevenson, 1869).
Lerwick's Old Tolbooth was not simply a tollbooth in the more modern understanding of the term that is to say a booth where road tolls (harbour charges or other charges for the right of way) and sometimes customs were collected. The original meanings of the Scots term tolbooth include i) a booth or office where tolls, market dues and other local imposts were paid to the municipality, hence the municipal buildings, including the room in which the Town Council met, the offices of various burgh officials etc., hence (1) the town hall; ii) a jail or prison, hence (2) the town prison. <ref>For more detailed references search for tolbooth in the Dictionary of the Scots Language.</ref>