Chiltern Toys was founded in Germany in 1881 as a toy export company, by brothers Josef and Gabriel Eisenmann. In 1908, Chiltern works toy factory was opened, only concentrating on doll production. As we so many British company's, it was the onset of the war that led it to teddy bear making, when it launched Master Teddy, in 1915.Master Teddy, was one of the most popular lines ever produced, and despite his lack of good looks is still highly collectable today. Master Teddy was based on a character in 'The Teddy Tail League', a cartoon published by the Daily Mail.

In 1919, Josef Eisenmann died, leaving complete control of the business to Leon Rees. In 1920, Rees formed a partnership with a friend Harry Stone and together they formed H. G. Stone Ltd., making soft toys at the Chiltern Toy works in Chesham. The first range of toys to be sold under the Chiltern Toys label was launched in 1923, and included the hugely successful Hugmee bears a year later. Leon Rees died in 1963 and in 1964 Chiltern Toys were taken over by the Dunbee Combex Group. Eventually, in 1967, it became a subsidiary of Chad Valley.