The Sperry Gyroscope Company was originally organized by electrical inventor Elmer Ambrose Sperry (1860-1930) for the purpose of manufacturing and marketing his ship gyrostabilizer, gyrocompass, and high-intensity searchlight. The Sperry Gyroscope Company was incorporated on April 14, 1910. It was reincorporated in New York as the Sperry Gyroscope Company, Inc., on January 21, 1929. In April 1933 it became a wholly-owned subsidiary of the Sperry Corporation and was merged into it as a division in December 1947. The Sperry Corporation merged with Remington Rand, Inc., on June 30, 1955, to form the Sperry Rand Coproration. Sperry Rand was renamed the Sperry Corporation in July 1979, and in November 1986 it merged with the Burroughs Corporation to form the Unisys Corporation.

During the years between 1915 and 1925 Sperry worked closely with the United States Navy to develop airplane stabilizers, gyrostabilized bombsights, automatic fire control systems, the aerial torpedo, and a number of anti-aircraft devices.

In 1928, two years before his death, Sperry sold the company to North American Aviation, Inc., a huge aviation holding company organized by Clement M. Keys that combined a number of major aircraft manufacturers and several important airlines. It was for this reason that the company was reincorporated in 1929. North American Aviation came under the control of General Motors but was broken up under the Air Mail Act of 1934. Sperry Gyroscope and an associated firm, the Ford Instrument Company, Inc., were spun off to a new holding company, the Sperry Corporation, in April 1933, which, with the breakup of North American Aviation, became an independent company.

In the 1930s and 1940s Sperry Gyroscope worked with Stanford and MIT to develop the microwave tchnology that was necessary for modern radar systems. During the Second World War the company grew more than ten-fold as it produced computer-​controlled and stabilized bomb sights for the B-17 and B-32 bombers, automatic pilots, fire control systems, airborne radar equipment, and automated take-​off-​and-​landing systems. It soon outgrew its Brooklyn plant, and the government built a new facility at Lake Success, Long Island.

After the war Sperry began to look to the civilian market. In 1947 it acquired the New Holland Farm Machine Company. However, with the outbreak of the Cold War, Sperry continued to be primarily a military contractor. It played a major role in the development of surface-to-air missiles and nuclear submarines. The 1955 merger with Remington Rand provided Sperry with access to advanced computer technology, which it applied to the military sector. During the 1960s the company was a major contractor for the Mercury and Apollo projects, as it helped to develop the computerized command and control systems for the Atlas rocket.