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Friedrich Gretsch manufactured banjos, tambourines, and drums until his death in 1895. moved operations to a larger facility where Gretsch went on to become one of the most prominent manufacturers of American musical instruments.Most modern-era Gretsch guitars are manufactured in the Far East, though American-made "Custom Shop" models are available.FMIC discontinued the low-end bolt-neck Electromatic models of the late 1990s and early 2000s.The renewed Electromatic Hollowbody line became successful, from the 5125–5129 series (with U.Factory fires in the early 1970s caused serious problems, and production was finally halted by Baldwin in 1981. While this guitar model did little to bolster Gretsch's reputation for producing classic guitars, it served notice that Gretsch was back.After numerous failed attempts to acquire facilities or contract production in the United States, Fred Gretsch and long-time Gretsch employee Duke Kramer, who advised Gretsch, turned to Terada of Japan, and production began there.The company ultimately owned or operated six properties in the immediate area, including a warehouse on Dunham Place.

During the 1950s and 1960s, Gretsch also sold several different models of amplifiers badged with the Gretsch name to accompany its guitars.

Body and headstock shapes were made more "vintage correct." Hollowbodies resumed construction from three-ply wood laminate rather than the five-ply of the 1990–2002 period.

Duo Jets were chambered in accordance with vintage practice.

The trestle bracing of the 1959–1961 era was re-introduced on the Setzer line and other selected models.

Gretsch also introduced models with features intended to attract modern players, including TV Jones pickups, locking Sperzel tuners, and "ML" bracing designed by Mike Lewis of FMIC and Masao Terada of the Terada company in Japan, where all Gretsch Pro Series guitars are built.

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