The village was constructed by shipbuilder William Gray and Company to house workers at his Graythorp shipyard on Greatham Creek/Seaton Channel on the River Tees.
Graythorp today is an industrial estate historically associated with a shipyard basin currently operated by Able UK as a marine recycling facility.
In 1913 the Hartlepool shipbuilders William Gray & Company leased land to construct a shipyard off Greatham Creek near the mouth of the Tees capable of building ships of 20,000 tons in weight.
[1] In 1996 Able UK Ltd purchased the yard and used it to do dismantling work for several petrochemical companies, while allowing the tenant construction of other marine structures.
[1][2] In 2003 Able UK signed an £11m deal with the US Marine Administration to dismantle 13 US warships; subsequently the process was opposed by some local residents and environmental groups due to the presence of asbestos and other toxins on the ships.