The mill was founded by Samuel Greg in 1784 for spinning cotton. After his retirement in 1834 his son introduced weaving. The original water wheel was built between 1816 and 1820 and was designed by Thomas Hewes. The wheel broke in 1905 and was replaced by 2 water turbines which were powered by the River Bollin. Today it has a water wheel which was originally from Glasshouses Mill. It is the most powerful working wheel in Europe. It was designed by Sir William Fairbairn who was an apprentice of Thomas. The mill was known for its use of unpaid child workers. They would stay in a building known as the Apprentice House; the hours were long and could be dangerous with some losing fingers, but mainly they were happy because it was a better place to be than the workhouse. The mill and surrounding estate was donated to the National Trust in 1939 by Alexander Carlton Greg. Commercial production stopped in 1959 but it still produces cotton calico today and also houses a museum about the cotton industry.
The mill is thought to be haunted by a group of former workers.