The company was founded in 1864 in Gateshead by William Clarke (1831-1890). In 1865 Clarke took in a partner, Abel Chapman, and the two of them developed the business into one of the largest manufacturers of cranes and other mechanical handling equipment in the world. In 1870 two further partners joined the firm, Joseph Watson and Joseph Gurney. The firm became known as Clarke, Chapman and Gurney. Joseph Gurney retired from the firm in 1882. The firm subsequently formed a partnership with John Furneaux and Charles Parsons, and became known as Clarke, Chapman, Parsons, and Company. Parsons left the firm in 1889.
By 1907 the firm manufactured an extensive range of ship's auxiliary machinery, mining plant, water tube boilers, and pumps. Clarke Chapman became the main supplier of auxiliary equipment to the British shipbuilding industry before the First World War.