The company was founded by Leo Fender as Fender's Radio Service in late 1938 in Fullerton, California, USA. While repairing musical instrument amplifiers in his electronics workshop he noticed their design flaws. He began making a few amplifiers using his own designs or modifications to designs. By the early 1940s, he had teamed up with another local electronics enthusiast named Clayton Orr (Doc) Kauffman, and they formed a company named K & F Manufacturing Corp. to design, manufacture, and sell electric instruments and amplifiers. Production began in 1945 with Hawaiian lap steel guitars (incorporating a patented pickup) and amplifiers, which were sold as sets. Leo Fender decided to concentrate on manufacturing rather than repair. Kauffman remained unconvinced, however, and they had amicably parted ways by early 1946. At that point Leo renamed the company the Fender Electric Instrument Company.

In early 1965, Leo Fender sold his company to the Columbia Broadcasting System, or CBS. At first, the sale was taken as a positive development, considering CBS's ability to bring in money and personnel. However, on hindsight, the sale is now looked back upon unfavorably, due to the reduction of the quality of Fender's guitars while under the management of CBS. In the early 1970s, the usual four-bolt neck joint was changed in favor of using only three. This change was made in an effort to save money, but it also resulted in a greater propensity toward mechanical failure in the guitars.

In 1985, in a campaign initiated by a company employee named William Schultz (1926-2006), the Fender Electric Instrument Manufacturing Company was bought from CBS by its own employees, and renamed Fender Musical Instruments Corporation.

While Fender mantains extensive production facilities across the world, its highest quality models are manufactured in the factory in Corona, California, USA. It also owns manufacturing facilities in Japan, Ensenada (Mexico), China, Indonesia (under Cort) and Korea (under Cort), where cheaper guitars are made with the Fender brand name. The older and American-built guitars are by far the most favoured, but pre-1990 Japan-made Fender guitars are now highly regarded as well. Fenders built in Ensenada, Mexico took over the role of the Japanese factory to produce the majority of Fender's guitars, while Japanese Fenders are now meant for the Japanese market and with only a small number marked for export.

In recent years, Fender Musical Instruments Corporation has branched out into making and selling acoustic guitars, and has purchased a number of other instrument firms, including the Guild Guitar Company , the Sunn Amplifier Company , and other brands such as SWR bass amplifiers . In early 2003, Fender Musical Instruments Corporation made a deal with Gretsch , and began manufacturing and distributing new Gretsch guitars.

Sources: Wikipedia article on Fender