In 1852 partners Horace Smith and Daniel B. Wesson formed a company to produce a lever-action pistol nicknamed the Volcanic pistol. The company became known as the "Volcanic Repeating Arms Company"; financial difficulties caused it to come into the majority ownership of investor Oliver Winchester. Previously, in the late 1840s, Daniel Wesson's brother Edwin, of Hartford, Massachusetts, had manufactured revolvers under the name of Wesson & Leavitt. After Edwin Wesson's death, that firm continued under the supervision of Thomas Warner.

In 1856 the partners left the Volcanic Company to begin a new company and to manufacture a newly-designed revolver-and-cartridge combination which would become known as the Smith & Wesson Model 1. The timing of the founding of this new company proved quite opportune for the partners, since the onset of the American Civil War five years later produced a great demand for Smith & Wesson's products, specifically the Smith & Wesson Model 2.

In 1867, Smith & Wesson began a global sales campaign that introduced the company's revolvers and ammunition to new markets, such as Russia, and established the company as one of the world's premier makers of firearms. The Smith & Wesson Model 3, eventually became known as the "Russian Model" and was a favorite of US Lawman, Wyatt Earp. The US Army adopted the Model 3 as the "Schofield" and used it throughout the Indian Wars of the West.

In 1964 the company passed from Wesson family control, and subsequently several conglomerates took control of it.

Between 1987 and 2001 Smith & Wesson was owned by the British engineering company Tomkins PLC.

In March 2000 Smith & Wesson signed an agreement with the Clinton Administration in order to avoid lawsuits. The company agreed to numerous safety and design standards, as well as limits on the sale and distribution of their products. Gun clubs and gun rights groups responded to this agreement by initiating large-scale boycotts of Smith & Wesson by refusing to buy their new products and flooding the firearms market with used S&W guns, cutting into their market share. This agreement signed by Tomkins PLC ended with the sale of Smith and Wesson to the Saf-T-Hammer Corporation. The new company (Smith and Wesson Holding Corporation), which publicly renounced the agreement, was received positively by the firearms community.

On May 11, 2001, Saf-T-Hammer Corporation acquired Smith & Wesson Corp. from Tomkins PLC for US$15 million, a fraction of the US$112 million originally paid by Tomkins. Saf-T-Hammer assumed US$30 million in debt, bringing the total purchase price to US$45 million. Saf-T-Hammer, a manufacturer of gun locks and other firearms safety products, purchased the company with the intention of incorporating its line of security products into all Smith & Wesson firearms in compliance with the 2000 agreement.

The acquisition of Smith & Wesson was chiefly brokered by Saf-T-Hammer President Bob Scott, who had left Smith & Wesson in 1999 because of a disagreement with Tomkins’ policies. After the purchase, Scott became the president of Smith & Wesson to guide the 157-year-old company back to its former standing in the market.[citation needed]

On February 15, 2002, the name of the newly formed entity was changed to Smith & Wesson Holding Corporation.

Cal. .44, between 1881 and 1923