The incident occurred at about 4:15 a.m. and it took until noon for work crews to pull the car off the tracks at the Queens Quay station and back to the surface.
"It was wedged very, very tightly and it took many, many hours to free that car and restore streetcar service," said TTC spokesman Danny Nicholson.
The 510 Spadina and 509 Harbourfront streetcars resumed normal service around noon.
There was no damage to any TTC equipment, Nicholson said.
The driver is believed to be from out of town, though this is the third time this year a vehicle has mistakenly gone down the Queens Quay tunnel.
Nicholson told CBC News the TTC has recently put up more signs to warn motorists but will now "take another look" at the tunnel entrance.