Orville Gibson (born 1856, Chateaugay, New York) started making mandolins in Kalamazoo, Michigan, United States. The mandolins were distinctive in that they featured a carved, arched solid wood top and back and bent wood sides. Prior to this, mandolins had a flat solid wood top and a bowl-like back (similar to a lute) made of multiple strips of wood. These bowl-back mandolins were very fragile and unstable. Disdainful of the shape, Orville Gibson characterized them as "potato bugs". Gibson's innovation made a distinctive, darker-sounding mandolin that was easier to manufacture in large numbers. Orville Gibson's mandolin design, with its single-pieced carved sides and a single-pieced neck, was patented in 1898; it would be the only innovation he patented. Orville Gibson died in 1918 from a tumor in his left scrotum.

1902–1950
In 1880 Gibson Mandolin-Guitar Mfg. Co, Ltd. was incorporated to market the instruments. Initially, the company produced only Orville Gibson's original designs. Aware of changing trends, the company hired designer Lloyd Loar in 1919 to create newer instruments. During the 1920s Gibson was responsible for many innovations in guitar and mandolin design. In 1922, the Gibson F5 mandolin model was introduced. That particular model later became known as the ultimate bluegrass mandolin. Gibson soon became the leading manufacturer of archtop guitars, particularly the L-5 model, also a Loar design. Loar left the company in 1924.

In the 1930s, Gibson began exploring the concept of an electric guitar. In 1936 they introduced their first "Electric Spanish" model, the ES-150. Other companies were producing electric guitars but the Gibson is generally recognized as the first commercially successful electric guitar. Other instruments were also "electrified"; such as steel guitars, banjos and mandolins.

During World War II, instrument manufacturing basically stopped at Gibson due to shortages of wood and metal. Only a few instruments were made with whatever parts were at hand. Gibson did war production instead, making wood parts for various military needs. Such shortages continued for a few years after the war and the only notable change occurred in 1946 when the Gibson name on the instrument headstock changed from a cursive script to the block style used to this day. This is seen at the head of the information block at top.

The ES-175 was introduced in 1949. The model has seen some variations over the years but it is still in production.

 
1996 Gibson Les Paul Studio Limited Edition Gem Series Topaz Gibson and Ted McCarty
In 1948, Gibson hired music industry veteran, Ted McCarty. He was promoted to company president in 1950. During his tenure (1950–1966), Gibson greatly expanded and diversified its line of instruments. The first notable addition was the "Les Paul" guitar. McCarty was well aware of the strong sales of the Fender Telecaster. In 1950, Gibson decided to make a solid-body guitar of its own according to its own design philosophy . This, despite the fact many other guitar manufacturers were contemptuous of the concept of a solid-body guitar. Designed by the guitarist Les Paul, the first solid body guitar, called the "Les Paul", was released in 1952. The "Les Paul" was offered in several models, including the Custom, the Standard, the Special and the Junior.

In the mid-50s, the Thinline series was produced. Many guitarists did not like the bulk of a full size archtop and wanted a thinner guitar. The first to be produced was the Byrdland. The first Byrdlands were slim, custom built, L-5 models for guitarists Billy Byrd and Hank Garland. Later, a shorter neck was added. Other guitarists who tried Gibson samples liked the idea and the model went into production. Other models such as the ES-350T and the ES-225T were introduced as less costly alternatives.

In 1958, Gibson introduced the ES-335T model. Similar in size to the hollow-body Thinlines, the ES-335 family had a solid center giving the string tone a longer sustain.

In the late 50s, McCarty was aware the Gibson was perceived as a "conservative" company, generally making traditionally shaped instruments. He decided to change that. In 1958, Gibson produced two new designs; the eccentrically-shaped Explorer and Flying V. Surprisingly, these "modernistic" guitars did not sell initially. It was only in the late 60s and early 70s when the two guitars were reintroduced to the market that they sold very well. The Firebird, in the early 60s, was a reprise of the modernistic idea; though less extreme.

In the 1950s, Gibson also produced the Tune-o-matic bridge system and its version of the humbucking pickup.

In 1961 the body design of the "Les Paul" was changed, due to the demand for a double-cutaway body design. Les Paul did not care for the new body style and let his endorsement lapse, and the new body design then became known as the SG (for "solid guitar"). The "Les Paul" returned to the Gibson catalogue in 1968 due to the influence of players such as Keith Richards, Eric Clapton, Jeff Beck, and Peter Green. Both the "Les Paul" and the SG later became very popular with hard rock and heavy metal guitarists; Jeff Beck with the Jeff Beck Group and solo in the 1970s, Jimmy Page of Led Zeppelin, the twin-lead line-up of Scott Gorham and Brian Robertson of Thin Lizzy, Duane Allman, Slash of Guns N' Roses and Velvet Revolver, and Ace Frehley of KISS are known for their preference for a Les Paul. Pete Townshend of The Who, Angus Young of AC/DC, Frank Zappa of Mothers of Invention, Adrian Smith of Iron Maiden, Robby Krieger of The Doors, Tony Iommi of Black Sabbath, and Joe Solo are some of the better-known SG players.