In 1938 Irvin Athearn built a detailed O scale model railroad layout in his mother's house, which gained an overwhelming response when he placed an advertisement to sell it.

[citation needed] Starting in the mid-1950s, Athearn produced shortened versions of streamlined and heavyweight passenger cars based on Southern Pacific and Atchison, Topeka and Santa Fe prototypes.

The comprehensive scope of the product line contributed to the popularity of HO as a model railroad scale, due to the ready availability of items and their low cost.

[1] The company produced a model of the Boston & Maine P4 class Pacific steam locomotive which incorporated a cast zinc alloy base and thermoplastic resin superstructure.

[citation needed] On October 16, 2009, Athearn announced that it would stop making blue-box kits, citing increased manufacturing and labor costs.

By June 2021, all service and spare parts for Athearn products had been shipped to the Horizon main complex in Champaign, Illinois, with repairs and warranty work all being performed there by July 2021.

The development team, sales and marketing continues to work remotely with all replacement parts and repair requests are handled on site in Champaign.