The Cascelloid Company was founded by Alfred Edward Pallett in Coalville, Leicestershire in 1909 to produce celluloid and fancy goods. Their first toy was in 1920 and the first doll in 1925.
Cascelloid was bought in 1931 by British Xylonite and the word "Palitoy" was created as a trademark in 1935 for their toy division. Injection moulding was developed by British Xylonite in 1941 and was used for the Palitoy toy ranges. In 1978 the Chad Valley toy company was sold to Palitoy.
Palitoy was sold to US food company General Mills in 1968, and formed part of the company's toy division.
In 1971 it had acquired non-UK rights when it bought Miro-Meccano in France from the receivers of another British toy group, Tri-ang. In 1981 Britsh toy group Airfix Products fell into receivership. Palitoy's owner General Mills acquired the Airfix kit range and its GMR model railways range. General Mills also snapped up UK rights to Meccano.
Palitoy effectively ceased to be an independent business in 1984 when its parent company, General Mills, closed its entire design department leaving it effectively just a sales and marketing operation. 1 May 1985 also saw the end of most manufacturing at Palitoy with 327 staff in manufacturing and distribution out of 585 made redundant and manufacturing shifted overseas.
Over the next few years, Palitoy was sold through various companies until finally becoming part of Hasbro in 1991. Hasbro closed the former Palitoy site in 1994.