In the late 1980s Wally Conron, through the Royal Guide Dog Assn. of Victoria Australia, set out to find an allergy and asthma friendly guide dog at the request of a vision-impaired woman from Hawaii.  After rejecting countless poodles with various problems, Wally crossed a standard poodle with one of their best producing Labradors.  Out of those three pups that were born, one was allergy friendly.  He aired a story on a Melbourne television channel where he coined the word Labradoodle to describe this new Guide Dog.  Soon the new breed of Guide Dogs was in great demand.

When Wally Conron ended his program, two breeding and research centers, Rutland Manor and Tegan Park, continued on with the goal of developing consistent non-shedding, allergy and asthma friendly dogs with the temperament of a service dog.  They selectively bred to improve conformation, coat type, and temperament.  In the 1990s other pure breed dogs were infused into the developing new breed.  Each infusion was selected for specific reasons and at specific times.  The other pure breeds used were:  the Irish Water Spaniel, the English Cocker Spaniel and the American Cocker Spaniel.  Some lines have reported infusions of Curly Coated Retriever.  Today, the Australian Labradoodle would be those dogs with pedigrees to include the initial cross between the Poodle and Labrador, with the spaniel infusion included.