Robert Stephenson and Company was founded in 1823 and was the first company established to specifically build railway engines. The company was set up in Forth Street in Newcastle-upon-Tyne by George Stephenson, his son Robert with Edward Pease and Michael Longridge. It was founded as part of the construction of the Stockton and Darlington Railway.

In 1937 Robert Stephenson and Hawthorn was formed when Robert Stephenson and Company, which was based in Darlington, took over the locomotive building department of Hawthorn Leslie and Company, based in Newcastle upon Tyne. At the time Robert Stephenson and Company had built 4,155 engines and Hawthorn Leslie and Company a further 2,783 making a total of 6,938. Robert Stephenson and Company (RSH) thus began with number 6938 for the locomotives produced by the combined organisation. In 1938 the goodwill of the Kitson and Co and Manning, Wardle and Co companies was bought.

During the Second World War the plant was fully occupied building 0-4-0 and 0-6-0 saddle tanks for industrial use