Unionised employees had refused to go back to their jobs at the twin plant complex near high-tech hub Bangalore following an end to an eight-day company lockout last month, amid a dispute over pay and other issues.
Toyota Kirloskar Motor Private Ltd is the Indian unit of the world's biggest carmaker.
"All the workmen have returned to work and things are returning to normal," a company spokesman said.
The union said there was still no settlement of the pay row over which the two sides have been at loggerheads for nearly a year.
But the dispute has been "referred to the industrial tribunal for adjudication", Toyota Kirloskar Motor Union general secretary R. Satish told AFP.
Union members voted late Monday to "return to work in the interests of all", Mr Satish said.
Toyota carried out limited production during the standoff using non-unionised engineers, supervisors and other workers at the plant established in 1997.
But it said the dispute had sharply curtailed output at the plant, which employs some 6,400 workers. The union says 4,200 of them are union members while the remainder are on contract.
Toyota Kirloskar Motor's Bangalore complex produces 310,000 autos annually, including Toyota's flagship Camry sedan, the Corolla, and the Prius hybrid, mostly for the domestic market.
The workers' decision to return to their jobs came after the state government of Karnataka, home to the Toyota manufacturing complex, at the weekend ordered the two sides to restore operations "to maintain industrial peace and harmony".
The workers have been demanding wage rises of up to 4,000 rupees ($65) a month while Toyota is offering a maximum $3,000 rupees.