Farrar & Rinehart was founded in June 1929 by John C. Farrar (vice president) and Stanley M. Rinehart (president), in partnership with Frederick R. Rinehart. In forming the company, Farrar and the Rineharts left the massive Doubleday, Doran publishing house, the result of a merger between their mutual employer, the George H. Doran Company, with Doubleday, Page & Company in 1927. Mary Roberts Rinehart supported her sons and their company by leaving Doubleday, Doran; her bestselling mysteries became a mainstay of the new imprint.
"We will never grow so large that all members of the firm cannot read and be interested in any book we publish," Farrar said. "While we believe in applying journalistic methods to publishing we feel that … there is a need for literature that is written in quiet places and that is brought to the public with dignity.
Farrar & Rinehart became one of the most successful publishing houses of its era. Its bestsellers included Hervey Allen's Anthony Adverse (1933), which sold more than two million hardcover copies.
In February 1943 Farrar & Rinehart received the first Carey-Thomas Award for creative publishing from Publishers Weekly. Named for U.S. publishers Mathew Carey and Isaiah Thomas, the award recognized good publishing — "the creative idea, cooperation with the writer, careful production and imagination and successful marketing." The Manhattan publisher won the award for seven volumes of the Rivers of America Series, which was found to be "the best example of creative publishing in the year 1942.