"Caol Ila" is the Gaelic name for "Sound of Islay", the narrower that separates the island of Islay from that of Jura, on the west coast of Scotland.
The distillery, located on the Sound Coast, was founded by Hector Henderson in 1846. Over time it has changed properties several times: it was acquired in 1854 by Norman Buchanan, in 1863 by Bulloch Lade & Compagny and in 1920 by a group of men which formed the "Coal Ila Distillery Company Ltd". In 1930 the property went to Scottish Malt Distilleries. Today, distillery belongs to the Diageo multinational group.