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The area that is now called Wolseley was originally part of the Parish of St. James, and was annexed into the City of Winnipeg in 1882. It was developed primarily between 1905 and 1930 as a middle and upper middle class residential area.

Wolseley was home to an amusement park for several years before it closed permanently in 1909. Happyland included a 90-metre Doric-style entrance, a roller coaster, ballroom, Japanese tea gardens, Ferris wheel, and a 240-metre circular swing.

Beginning in the 1950s, Wolseley began to change as many upper-middle-class families left the area to settle in Winnipeg's suburbs. Many of the homes were subdivided into rooming houses. In the 1970s and 1980s, the large houses, central location, and low real estate prices enticed many young people to return to Wolseley. This new Wolseley generation were largely artistic and socially active young adults who began rejuvenating and gentrifying the area. During this time, the area became affectionately known as "The Granola Belt". Today, Wolseley is once again seen as a desirable residential area, and is one of the most intact pre-1930 residential areas in Canada.