The factory had its origins in an official request made 8 September 1760 by the porcelain maker Georg Heinrich Macheleid (1723 -1801). Macheleid had long worked in the glass manufactory at Glücksthal and had gained the arcana of porcelain-making by his own researches, apparently independent of Ehrenfried Walther von Tschirnhaus and Johann Friedrich Böttger, the ceramists at Meissen. He wished to open a privileged porcelain factory, making true hard-paste porcelain, intended to be sited in Sitzendorf.[3] In 1762 the privilege was granted by John Frederick, Prince of Schwarzburg-Rudolstadt, a great patron of the arts and music, specifying that the manufactory was to be set up near his princely court of Schwarzburg-Rudolstadt, under his personal direction.
Volkstedt gained a reputation for its finely painted and carefully modeled porcelain figures that it holds for collectors today.
In 1797 Ernest Constantine, Landgrave of Hesse-Philippsthal, acquired the porcelain manufactory in Volkstedt, which he sold two years later. Following the reunification of Germany, in 2006/07 the factory buildings were restored to their 18th-century appearance and opened to the public.
During the 19th century the manufactory attracted subsidiary and rival workshops in Rudolstadt: they included Beyer & Bock, Karl Ens, Kämmer & Kramer, Ernst Bohne Söhne, Műller & Hammer.
Marks, in underglaze blue, include the ubiquitous crowned N adopted from Capodimonte by many manufactories, closed crown and R (Rudostadt) with crossed swords (adopted from Meissen) or 1762.