The Gretsch Company was founded in 1883 by Friedrich Gretsch, a 27-year-old German immigrant recently arrived in the United States. Friedrich Gretsch manufactured banjos, tambourines, and drums, until his death in 1895. In 1916, his son, Friedrich Jr., moved operations to Brooklyn, New York, where Gretsch went on to become one of the most prominent manufacturers of American musical instruments.
Guitar production began in the early 1930s, and Gretsch guitars became highly sought after, most notably in the 1950s and 1960s. They lost favor with players during the 1970s and 1980s for various reasons, including a problematic relationship with the Baldwin Piano Company. Gretsch eventually slid into bankruptcy, but it was revived by Fred W. Gretsch in 1989. Gretsch, who is great-great-grandson to Friederich Gretsch, and is sometimes referred to as Fred Gretsch III, remains president of the company to this day.
Most modern-era Gretsch guitars are manufactured in the Far East, though American-made "Custom Shop" models remain available. In 2003 Gretsch entered into an agreement with Fender Musical Instruments Corporation (FMIC), under the terms of which Fred Gretsch III would continue to own the company, with FMIC handling most development, distribution and sales.