Bayer was founded in 1863 in Barmen as a partnership between dye salesman Friedrich Bayer and dyer Friedrich Weskott. As was common in this era, the company was established as a dyestuffs producer. The versatility of aniline chemistry led Bayer to expand their business into other areas, and in 1899 Bayer launched the compound acetylsalicylic acid under the trademarked name Aspirin. In 1904 Bayer received a trademark for the "Bayer Cross" logo, which was subsequently stamped onto each aspirin tablet, creating an iconic product that is still sold by Bayer. Other commonly known products initially commercialized by Bayer include heroin, phenobarbitol, polyurethanes, and polycarbonates.

In 1925 Bayer merged with five other German companies to form IG Farben, creating the world's largest chemical and pharmaceutical company. Following World War II, the Allied Control Council seized IG Farben's assets because of its role in the Nazi war effort and involvement in the Holocaust, which included using slave labour from concentration camps, the purchase of humans for dangerous medical testing, and production of Zyklon B, a chemical used in gas chambers. In 1951 IG Farben was split into its constituent companies, and Bayer was reincorporated as Farbenfabriken Bayer AG. Bayer played a key role in the Wirtschaftswunder in post-war West Germany, quickly regaining its position as one of the world's largest chemical and pharmaceutical corporations.