This paper proposes a topological hierarchy-based approach to toolpath planning for multi-material layered manufacturing (MMLM) of heterogeneous prototypes. The approach facilitates control of MMLM and increases the fabrication efficiency of complex objects by generating multi-toolpaths that avoid redundant tool movements and potential collisions. It uses a topological hierarchy-sorting algorithm to group complex multi-material slice contours into families connected by a parent-and-child relationship. Subsequently, a sequential toolpath planning algorithm generates multi-toolpaths for sequential deposition of materials without redundant tool movements. To reduce build time further, a concurrent toolpath planning algorithm generates collision-free multi-toolpaths to control the tools that deposit materials concurrently. It uses parametric polygons to construct tool envelopes for contour families of the same material property to simplify detection of tool collisions. The tightness of polygons can be controlled to suit the processing speed and the optimality of the resulting concurrent toolpaths. The proposed approach has been implemented as an integral part of a multi-material virtual prototyping (MMVP) system that can process complex slice contours for planning, stereoscopic simulation, and validation of multi-toolpaths. It may be adapted for subsequent control of MMLM processes.