The history of the union can be traced back to the formation of the Journeymen Steam Engine, Machine Makers' and Millwrights' Friendly Society, in 1826, popularly known as the "Old Mechanics".

[3] Exploiting the downturn in economic conditions in the engineering industry, they demanded the union forfeit control over overtime.

[5] However, during World War II the AEU also lost its overseas branches in Australia, New Zealand, and South Africa, which became independent unions.

The union was now organised on a federal basis, with four sections: Engineering, Foundry, Construction, and Technical, Administrative and Supervisory (TASS).

[citation needed] In 1992 the AEU finally achieved a merger with the Electrical, Electronic, Telecommunications and Plumbing Union, EETPU, after a hundred years of off and on discussions.