Located 33 km from Adelaide and 410 metres above sea level, Lobethal is a pleasant and substantial village with its roots deeply embedded in the early history of South Australia.

Lobethal's origins date back to 1838 when George Fife Angas went to London as a director of the South Australian Company to promote colonisation. While there, he met Pastor August Ludwig Christian Kavel who was attempting to organise for Lutherans (who were being persecuted by the King of Prussia, Friedrich Wilhelm III) to emigrate. Angas was moved by the plight of the Lutherans, and not only did he persuade Kavel that South Australia was a suitable place for emigration, he also assisted them financially with a generous £8,000. The first German settlers arrived on 25 November, 1838 at the unfortunately named Port Misery. These settlers were to establish distinctly German villages at Klemzig, Glen Osmond, Lobethal and most famously Hahndorf.

Eighteen families in this group subsequently purchased 168 acres on the present site of Lobethal and divided it up amongst themselves. On the day of the division of the land, according to Ey's account 'it received the name Lobethal, taken from the II Book of Chronicles, chapter 20, verse 26, which, according to Luther's translation, means 'Valley of Praise'.

Originally laid out in a careful democratic way (known as the Hufendorf settlement pattern) where the houses ran along the road and the land attached to the houses stretched behind them in narrow strips, the town prospered. The people worked hard and, over time, Lobethal became an important centre in the agriculturally rich valleys behind the Adelaide Hills.

Lobethal's first settlers were passengers from the sailing vessel "Skjold". After landing at Port Adelaide they headed to existing German communities for temporary accommodation. A shepherd alerted the Hahndorf contingent to good land near the upper reaches of the Onkaparinga, and 18 families decided to move there. Their guide and mentor, Pastor Fritzsche, came too, with his wife and mother-in-law (a woman whose financial help for cash-strapped migrants was vital to the town's early development). The village was fashioned in the same way as Bethany and Langmeil - as a 'hufendorf'. The main street became Mill Road, and while the town may have developed out of recognition, elements of the 'hufendorf' layout remain.
The history of the first residents has been accurately recorded by Reverend I. Ey who, in 1880, wrote that 'The bulk of the persecuted Lutherans of Lobethal, with their beloved pastor (G.D. Fritsche) came out in the ship 'Skjold' which arrived in Port Adelaide on 28 October 1841, after an eighteen weeks' trip, during which no fewer than forty-four deaths occurred. They were temporarily taken care of and welcomed by the somewhat earlier pioneers of Klemzig and Hahndorf, and some went up to the Tanunda district.'

Industry came in 1850 with F.W. Kleinschmidt's brewery. It closed after about two decades when Kleinschmidt decided to concentrate on hop growing which subsequently became one of Lobethal's prime products. The vacated brewery building then housed the Lobethal Tweed Factory - this eventually became the Onkaparinga Woollen Company, employing hundreds of local people until its closure a few years ago. Onkaparinga textile products were widely known around Australia. The wool company began at Hahndorf with a settler named Kramm, whose 'factory' comprised hand looms in a mud hut with thatched roof. Two Lobethal brothers named Kumnick persuaded him to move to the disused brewery building in Lobethal.

By 1875 the business had grown so much that larger premises were needed. The foundation stone of the new building, was laid by Marie Sudholz, whose father, J.W. Sudholz, was a director of the new company and, at Gilles Plains, the colony's largest hay producer (hence Sudholz Road). In 1894 one of C.W. Kumnick's sons, Ewald, took over his father's carpentry business and promptly introduced an industry hardly expected from the son of a German settler; he converted a disused church, Zum Krueze Christi, to make cricket bats from locally grown willow. In a short time he was able to claim the patronage of 'nearly all the country clubs and a large number of those in the city, while customers in other colonies are also supplied'. In 1931, when money was hardly being tossed about, the factory produced 3000 bats, and the company continued until about 1950.

Other businesses over the years included fruit drying and brickmaking. And Lobethal beat Adelaide by almost half a century in staging an Australian Grand Prix race. After a hill climb event in 1937, motor racing on an 8.7 mile (14km) main road circuit followed. Passing through Lobethal and the village of Charleston, this awesome circuit played host to the Australian Grand Prix in 1939. Car and bike races were held from 1937-1940 and again, after the War in 1948.

During World War I, the town was struck by intense anti-German feelings (rather ironic given that most of the residents could trace their origins back to 1841) and was re-named Tweedvale to honour the town's major industry. However, the new name didn't have quite the same ring. Lobethal wasn't forgotten, and it reverted to its original name in 1935. The town is not as overtly Germanic as Hahndorf and Tanunda, but the influence remains. Apart from hints of 'hufendorf' along Mill Road, the town boasts the oldest Lutheran church in Australia - St John's, built in 1845.

Satellite buildings around the church have also survived, in particular a single room cottage which became the first Lutheran theological seminary. By 1962 this half-timbered building had been enclosed within a new building and became the centrepiece of the Lobethal Archives and Historical Museum (open by appointment). Its displays reflect well the diverse history of the district, and it has as one of its prize possessions the 1641 Bible which belonged to Pastor Fritzsche.

An annual tradition sees the people of Lobethal providing a display of Christmas lights which brings Adelaide people in droves during the weeks leading up to Christmas, and with the planned Lobethal Grand Carnival to celebrate the unique motor racing heritage of Lobethal, the hamlet steeped in history will once again become a household word.