The Aeolian Company was founded by New York City piano maker William B. Tremaine as the Æolian Organ & Music Co. (1887) to make automatic organs, and, after 1895, as the Æolian Co. automatic pianos as well. (He had previously founded the Mechanical Orguinette Co. in 1878 to manufacture automated reed organs.) The manufacture of residence or "chamber" organs to provide entertainment in the mansions of millionaires was an extremely profitable undertaking, and Aeolian virtually cornered the market in this trade, freeing them from the tight competition of church-organ building with its narrow profit margins. Elaborate cases and consoles were often featured in residence organs. In other installations, the pipes were hidden behind tapestries, under or above staircases, or spoke from the basement through grilles or tone chutes. They also made Organettes and Player Pump Organs for the "Working Man" to buy.
The pianola, a pneumatic player piano, soon after became extremely popular. It had been invented in 1895 by Edwin S. Votey, president of the Farrand & Votey Organ Co., Detroit. In 1897, Votey joined Aeolian  and in 1900 the firm obtained the patent for such instruments.
In 1903, Tremaine absorbed a number of companies making self-playing instruments, including the [Albert] Weber Co., a New York piano maker since 1852, into the Aeolian, Weber Piano & Pianola Co.
In 1904 Aeolian sued the Los Angeles Art Organ Company for patent infringement of its player mechanism, leading to court victories that effectively shut down a competitor. Other patent lawsuits were not always successful.
As the pianola, in its turn, was supplanted by the newer Æolian’s “Duo Art” reproducing piano (1913), which could reproduce the sound of a famous artist playing without manual intervention, the Æolian, Weber Piano & Pianola Co. became the world’s leading manufacturer of such roll-operated instruments.
In 1916 the Æolian Co. started making Vocalion phonographs and in 1917/8 started Vocalion Records, a maker of high-quality discs which in December 1924 was sold to Brunswick Records. The phonograph was one of the main factors in the demise of the player piano, although Starr made players and records as well as pianos. An attempt of the company to engage in the production of church and concert organs resulted in important installations at Duke University Chapel and Longwood Gardens. It was undermined by the Great Depression, during which the organ division was merged with the E.M. Skinner Organ Co. to become the Aeolian-Skinner Organ Co., a leading builder until the 1970s. As the popularity of the player piano faded with the rise of the gramophone and radio, the company merged in 1932 with the American Piano Corp. (itself a 1930 consolidation of Chickering & Sons, Knabe & Co., and other manufacturers). The combined company was the Aeolian Corp. in 1959; it declared bankruptcy in 1985.
Interesting enough, it is the Organettes and the Player Pump Organs that have survived today and still are collected and enjoyed by their collectors. So loved are these smaller machines, they have been restored and in fact there are places to buy recuts of the original music. An example of a surviving, working piano can be seen and heard at Peary's Eagle Island State Historical Site, Harpswell, Maine.
An example of a surviving, working organ can be seen and heard at Reynolda House Museum of American Art in Winston-Salem, NC. On January 27, 1917, R. J. Reynolds contracted the Aeolian Company of New York for a pipe organ with four keyboards and a pedal footboard. Today, the organ has approximately 250 organ rolls and is played in the afternoon for visitors.