Nicholas Knauf and Peter Juckem founded a grain elevator on East Main Street in Chilton in 1866.  William N. Knauf and Frank Tesch (K & T) were later the owners and they took the company name from their initials. They built a gristmill and general store to sell seed to farmers. They used the 1872 railroad to ship barley and oats to markets; that lead to selling barley to Milwaukee breweries. In 1920, the company became a national supplier of peas to be used for pigeon feed. It expanded into making feed for birds and other small animals, becoming the first commercial supplier of wild bird seed in 1955.
William Engler Sr., long-term employee and son-in-law of William N. Knauf, purchased the company in 1964 and renamed it Kaytee Products, Inc. His son, Bill Engler Jr., took over the company in 1982. Bill Engler Jr. was named the Small Business Person of the Year in 1993 by United States President Bill Clinton. As of 1993, Kaytee had 365 employees and annual sales of about $70 million. At that time, it also held about 1300 exotic bird species in an aviary in Chilton.
In April 2012, Kaytee recalled five lots of parrot handfeeding formula due to excessive vitamin D This was acknowledged on the Kaytee website as well as through emails with some customers. .
On May 12,2012 several types of mouse, rat and hamster food was recalled for possible salmonella contamination. There are anicdotal reports on line of animals perishing.
In February 2013, Kaytee recalled a number of treat mixes due to reports from their parsley supplier of salmonella contamination. No salmonela was found in the actual treat mixes, but to comply with FDA regulations they recalled all mixes containing that parsley.
Kaytee Preferred Birds branding raises and provides young birds to many pet store chains in the US, such as Petsmart . Oklahoma State places externs with Kaytee Preferred Birds . Kaytee Preferred Birds was dismantled and closed in 2007.