The Daisy story begins in Plymouth, Michigan, a town situated near Detroit, in the late 19th century. One of the first mass-produced American-made air rifles was the "Chicago", a wood-and-steel gun that was manufactured by the Markham Air Rifle Co. of Plymouth. Introduced in 1885, it set the trend toward training guns which could be mass produced and sold at low prices. Plymouth resident Clarence Hamilton worked as a watch and clock repairman.

At that time, windmills played an important role on farms and rural homesteads as a cheap and efficient method of pumping water. These windmills typically were made from wood, but Hamilton thought that iron windmills would be better, stronger and cheaper than the wooden variety. He received a patent for this idea, and, along with his employer and several local businessmen, the Plymouth Iron Windmill Company was born. Like the windmills of the period, air rifles were also made from wood.

In 1888, Hamilton's inventive spirit again showed itself, this time in his idea for an all-metal air rifle. When Plymouth's directors gathered to examine the first model of his new gun, Lewis C. Hough, the general manager, exclaimed "Boy, that's a daisy!" The original model was a lever-action gun that featured a cast metal receiver and a heavy-gauge wire stock. Like Markham's "Chicago", this rifle and its successors used lead shot ammunition. Plymouth's management decided to produce a few of these rifles, but rather than selling them outright, they were offered as a premium to farmers who purchased the company's windmills. A market for these air rifles followed, and they quickly became Plymouth's most popular product. By 1889, air rifle production had completely replaced iron windmills in the company's product line. Six years later, the Plymouth Iron Windmill Co. became the Daisy Manufacturing Co.

In 1898, Hamilton sold his interest in the company and went on to manufacture iron-frame .22 caliber rifles of his own design. By this time, Louis Cass Hough had become manager of the firm, and Daisy would remain in the Hough family for more than sixty years. At about the turn of the century, A. W. Chafee, the salesman responsible for the introduction of Markham's "Chicago" air rifle, became dissatisfied with his employer. He proposed that rival Daisy manufacture an all metal air rifle that he could sell. This model, which was known as the "Sentinel", compelled Markham to produce their own metal air rifles, which were sold under the "King" brand. On August 11, 1929, Daisy acquired the King Manufacturing Co., the successor of Markham, and its machinery was moved to the Daisy plant where manufacture of the King air rifle was continued.

Original Daisy rifles were lever-action guns, with the pump action Model 25 joining the Daisy family in 1913. This design, which was invented by Charles Lefever and virtually unchanged since, has been responsible for over 8 million sales. Lefever was a Daisy employee until 1953. During his tenure, he also designed several other Daisy products, including a water pistol and the lever-action Military Model Number 40 with socket-style bayonet. This popular gun, which sold for $5, was introduced during the First World War and contributed to Daisy's first half-million dollar sales year in 1916.

During the 1920s, Daisy management noted that quite a few air rifles were being returned to the factory with steel ball bearings lodged in their barrels. Upon investigation, it was determined that these guns were all from the Minneapolis area, where local boys found that the scrapyard of the American Ball Company was a good source of free ammunition. These reject bearings were sometimes slightly oversized, and were prone to jam guns into which they were loaded. American Ball soon began to manufacture BBs, and shortly afterward, the company was purchased by Daisy and relocated Plymouth. BB production remains a staple of Daisy, with production exceeding 55 million BBs per day by the late 1980s.

As the Great Depression spread across America in the 1930s, Daisy actually prospered at a time when other companies were scaling back or closing down. The company's popular Buck Rogers Twenty-fifth Century Rocket Pistol, Disintegrator, and Water Pistol, introduced in 1934, were popular sellers for the Michigan firm, and orders nearly outpaced production. Daisy followed suit in 1936 with the Superman Krypto Ray Gun, which projected images onto walls and other surfaces. Daisy rifles also found markets in Europe, South Africa, Australia, and China, and many foreign companies produced and marketed their own air rifles that, in some cases, were pirated from the Daisy designs. Sales were handled both through dealers and via direct mail.

The company turned to personal endorsements as a boost to sales, and such notables as Captain Eddie Rickenbacker, John Philip Sousa, and Tris Speaker appeared in Daisy advertisements that were often found on comic book covers and in youth publications. Daisy also entered into a deal with cowboy stars Buzz Barton and Buck Jones, both of whom were featured on namesake rifles. Prior to the Second World War, comic strip cowboy hero Red Ryder also was the subject of a Daisy namesake rifle. The 1,000-shot lever-action Red Ryder Carbine was a huge success throughout the 1940s and 50s, and is still marketed today as a commemorative model. Daisy continued its long tradition of lever-action western-style rifles with the production of the Spittin' Image 94, an accurate copy of the famous Winchester Model 94 rifle.

This model has become the best-selling BB gun in Daisy history. With the exception of a few wooden toy guns, the production of BB guns was discontinued during the Second World War, and Daisy turned its facilities over to military production. Production resumed after the war, but was curtailed during the Korean War. By the mid-1950s, full-scale production had resumed, and Daisy's annual sales topped the $5 million mark. As production costs rose in the Detroit area, the company began to search for a suitable new location. In 1958, Daisy's 70-year residency in Plymouth ended, and the company relocated to a 350,000 square-foot factory in Rogers, Arkansas.

Daisy has also maintained a relationship with America's armed forces. Daisy products have been used as training aids for the teaching of shooting skills to U.S. Army recruits. The Daisy shooting kits were also distributed to troops to teach instinctive shooting techniques during the Vietnam War. These kits have also been used by law enforcement agencies and have spurred a civilian offshoot consisting of an instruction booklet, a Daisy Model 2199 air rifle identical to that used by the Army, targets, ammunition, and safety glasses.

Daisy remains the dominant name in BB and airguns. In addition to their famous Model 25, Red Ryder, and Model 94 guns, Daisy also manufactures and markets precision target and match airguns suitable for competitive use by adult shooters. The El Gamo rifles and Model 128 Gamo Olympic are produced in Spain and feature barrels made by Walther. Daisy competition-grade guns have also been manufactured through a joint venture with German firm Feinwerkbau. The company also remains committed to promotion of shooting safety and marksmanship programs, including those sponsored by the National Rifle Association, the Boy Scouts of America, Jaycees, 4-H, and other organizations.