Some collectible American Flyer train sets are the wide-gauge line of premium electric models such as American Legion, President’s Special and Mayflower, launched by the company in 1925 under the name "Wonder Trains." Just prior to World War II, American Flyer launched a series of high-quality, die-cast train sets, such as the Union Pacific 4-8-4 Challenge Model 806, the Pennsylvania K-5 locomotive and the Baltimore & Ohio Royal Blue 4-6-2, in 3/16-inch scale.
William Ogden Coleman founded the Edmonds-Metzel Manufacturing Company in 1907 to produce the first American Flyer toy trains. These early windup, tinplate model trains were positioned as a less expensive alternative to large-scale electric train sets produced by Lionel and other manufacturers. In 1910, the company changed its name to American Flyer Manufacturing Company.
American Flyer struggled through the Depression until A.C. Gilbert, inventor of the Erector Set, bought the company in 1938. During World War II, the company devoted most of its manufacturing resources to the war effort. To keep model trains in the public eye, Gilbert featured American Flyer products in a display at the Gilbert Hall of Science in New York. The train set included 80 feet of train track, surrounded by mountains, waterfalls, crossings and towns.
The company struggled to compete with Lionel in the post-World War II period. After A.C. Gilbert died in 1961, his son, Alfred Jr., inherited the company. In 1966, Lionel bought American Flyer and continued selling popular American Flyer train sets such as the Alco PA and the Electro-Motive GP7.