Allison got into aviation in 1926 with the V-1410, an inverted version of the World War I Liberty engine.

In 1930, Allison received a contract to develop the V-1710 for the U.S. Navy's airships.  In 1935, the airship Macon crashed, the Navy cancelled the contract and James Allison sold the company to General Motors.

After World War II, responsibility for developing General Electric's J33 and J35 turbojets was transferred to Allison.  The company's first turboprop, the T38, first flew in 1949.

A management buyout in 1993 resulted in an independent company and a name change to Allison Engines.  In 1995  Rolls-Royce purchased Allison.