Stephan Schaffan, Sr., an immigrant of Czechoslovakia founded the Atlas Tool Company in the garage of his home in Newark, New Jersey, in 1924.

Steve Jr. created a "switch kit" which sold so well, that the entire family worked on them in the basement at night, while doing business as usual in the machine shop during the day.

Realizing they could actually make a living selling track and related products, the first factory was built in nearby Hillside, New Jersey, at 413 Florence Avenue in 1947.

In 1970, Atlas ventured more deeply into the growing N scale market with two locomotives made for the company by Rivarossi: the Baltimore & Ohio C-16 0-4-0T saddletank switcher commonly known as the Docksider or Little Joe and its converted cousin, the C-16a 0-4-0 with coal tender.

Also, beginning in 1971, Atlas began importing a line of O scale locomotives and rolling stock produced by Roco in Austria.

[7] Atlas entered the market for ready-to-run HO scale diesel locomotives in 1975, importing models produced in Austria by Roco.

In 1997 Atlas O, LLC was established as a separate business entity dedicated to producing multiple lines of O scale model railroad products including track, freight cars, locomotives and accessories, co-founded and led by James J. Weaver.

After spending many years developing a number of products across many price points, including a successful line of O scale sectional track, Weaver died in 2011.