In 1757, four years after Moravian missionaries founded the nearby settlements of Bethabara and Salem on the Wachovia Tract, a Welsh immigrant named William Johnson bought the square-mile heart of what is now the park. The Ellis family had held it briefly under a remarkable lease from Lord William Linville: five shillings down and a yearly rent of one peppercorn, payable at the Feast of Saint Michael the Archangel. Johnson built a fort overlooking the Yadkin River to shelter his family and neighbors during the French and Indian War. The site is marked today by a monument just south of the Manor House. He died in 1765 and is buried on Mount Pleasant, the highest hill in the area. A simple frame church was raised next to his grave in 1809 and still stands; weddings are still held there.

In 1859, James Johnson built an eighteen-room Manor House on the central hill as a wedding gift for his daughter Emily. The Johnson heirs sold the property in 1921 to William Neal Reynolds, brother of the tobacco entrepreneur R. J. Reynolds. Mr. Will, as he was known, expanded the tract to over 1,100 acres and the Manor House to twenty-eight rooms. He raised and raced Standardbred harness horses, turning Tanglewood Farm into a home for some of the country's finest pacers. His wife Kate, a horticultural enthusiast, began the extensive plantings and employed a German master gardener named Frank Lustig, who spent sixty years adding the 800-bush Rose Garden, the Arboretum behind the house, and the Fragrance Garden nearby. Lustig is buried in the small graveyard next to the historic church, alongside the people whose estate he helped grow.

The Reynolds couple had no children. In 1951, they willed Tanglewood to the citizens of Forsyth County as a public recreational park. The gift carried a condition. Will Reynolds had specified that the property was to be used only for the benefit of white citizens, or the ownership would revert to his heirs. Tanglewood opened in 1954 as a segregated park. When the Civil Rights Act of 1964 made it impossible to continue operating under those terms, the park's response was to close down the Manor House, the pool, the theater, the motel, and the restaurant rather than open them to Black residents. A federal court case finally forced desegregation in 1971. Under the reversionary clause, ownership returned to the Reynolds family, who leased it to a nonprofit and at last sold it to Forsyth County in 1976. Only then did Tanglewood become, in fact and in law, a park for everyone.

Tanglewood has two golf courses: the Championship Course, designed by Robert Trent Jones Sr., and the Reynolds Course. The Championship Course hosted the 1974 PGA Championship, won by Lee Trevino with Jack Nicklaus a single stroke back, in one of the closer Sunday afternoons in major championship history. Today the park's attractions sprawl across the old estate: the Arboretum and Rose Garden, a public pool, a dog park, the horse stables that still offer trail rides and hayrides in Mr. Will's tradition, and Mallard Lake, where visitors fish or rent paddleboats. The Manor House operates as a ten-room bed and breakfast, the Trophy Room restored after a mysterious 1980 fire.

The Festival of Lights began in 1992, funded by a grant from the Z. Smith Reynolds Charitable Trust and money raised by the Tanglewood Park Foundation. From its first season of twenty-five displays on a 1.5-mile route, it has grown to roughly 180 displays, seventy of them animated, strung along a four-mile drive. An estimated 300,000 visitors came through during the 2001 season, when the festival marked its tenth anniversary and dedicated displays to those killed on September 11 of that year. The light show has been listed among the top twenty events in the Southeast and the top hundred in North America. Drive it slowly on a cold night with the windows cracked, and a 1,100-acre Reynolds horse farm becomes, briefly, a tunnel of color.