The company that eventually became the TEAC Corporation was founded in August 1953. Originally named the Tokyo Television Acoustic Company,[4] it employed Katsuma Tani, a former aviation and aeronautics engineer, who established a reputation as a highly qualified creator of audio equipment.

In 1956 his brother, Tomoma Tani, brought home a hand-made, 3-motor, 3-head stereo tape recorder. This sparked Katsuma's interest in reel-to-reel tape recorders. Confident they could engineer a better tape recorder, the Tani brothers founded the Tokyo Electro-Acoustic Company on 24 December 1956.

The Tokyo Television Acoustic Company and the Tokyo Electro-Acoustic Company were merged to create the TEAC Corporation. The main focus of the new company was to design and manufacture tape recorders.

In 2013 Gibson Brands bought a majority stake in the company.