Gretsch was founded in 1883 by Friedrich Gretsch, a young German immigrant. His Brooklyn shop was made for the manufacture of banjos, tambourines, and drums. In 1895, at the age of 39, Gretsch died, and the successful company was taken over by his son Fred.Fred never found an adequate successor, and in 1967 Gretsch was sold to Baldwin Pianos,becoming a subsidiary.

The “Baldwin era” is not generally considered a high point in Gretsch history, though new models were introduced through the seventies and old favorites soldiered on. In 1979, after Fred Jr’s death, Chet Atkins withdrew his endorsement in response to quality problems and Gretsch’s unwillingness to pursue his vision of a solidbody nylon-string guitar. Factory fires in the early 1970s caused serious problems, and production was finally halted by Baldwin in 1981.

In 1989, another Fred Gretsch, nephew of Fred Jr., and his wife Dinah once again acquired their namesake company. Fred Gretsch and long-time Gretsch employee Duke Kramer, who advised Gretsch, turned to Terada of Japan, and production began anew. A range of reissues appeared throughout the nineties to mixed reviews. They were of generally high quality, but with notable non-vintage details and features; occasional US-built “Custom Shop” models were offered at significantly higher prices.
In late 2002, Gretsch and Fender reached an agreement giving Fender most control over marketing, production and distribution of guitars (although the Gretsch family still owns Gretsch Guitars).