In 1880, Margarete Steiff created the first Steiff animal, an elephant made of felt, that was intended for use as a pincushion.  The elephant was the first soft-filled fabric toy animal and soon became very popular with children, who enjoyed playing with it. 

In 1886, 5,170 elephants were sold and other animals were added to the product range.  The family business expanded and Fritz Steiff, Margarete's brother, assumed responsibility for sales and Richard Steiff, Margarete's nephew, joined the company in 1897. 

Richard Steiff attended art school in Stuttgart. He had always been fascinated by the relationships between humans and animals. This gave rise to the countless drawings of animals that he produced during visits to the "Nill" zoo. These drawings were as the basis for new Steiff articles. 

Richard Steiff created the most famous of these in1902 - the first Steiff bear that was given the designation "55PB" (55 cm tall, sitting, P = plush, B = jointed ["beweglich" in German]). Mohair plush, a new material, was used for the first time to make this unusual new product. 

American President Theodore Roosevelt - nicknamed "Teddy" - played an important role in the success of the Steiff bear and in the choice of name. "Teddy" was a passionate bear hunter. 

Clifford Berryman, a well-known American artist, began adding a decorative little bear to all of his Roosevelt caricatures. The popularity of "Teddy" Roosevelt and Berryman's drawings contributed towards making "Teddy's bear" and later the "Teddy bear" world famous.  This heralded the start of the Teddy boom and 3,000 Steiff bears were sold worldwide during the same year.