Abstract: A tool rack assembly is provided which permits compact storage of tools above a work bench area. The assembly has a frame and a plurality of panels. The frame may be attached to a workshop wall by securing the frame to wall studs. The panels each have a top pin which is positioned within a top hole of the frame, and each have a bottom pin which is positioned within a bottom hole of the frame. The top holes are preferably forwardly and downwardly sloped and have larger diameters than that of the top pins for each insertion of the top pins into the top holes and for gravitational biting of the top pins by the top holes. The top and bottom holes are preferably arranged in a V shaped orientation with forward most center holes. The assembly provides compact and convenient storage of tools and easy insertion and removal of the panels into the frame.