A Greek vase painting from 500 BC shows a boy playing terracotta yo-yo. 

The yo-yo was first invented in ancient Greece. The terra cotta disks were used
to ceremonially offer the toys of youth to certain gods when a child came of age,
discs of other materials were used for actual play.

In 1928, Pedro Flores opened the Yo-yo Manufacturing Company in Santa Barbara, California. The business started with a dozen handmade toys; by November 1929,
Flores was operating two additional factories in Los Angeles and Hollywood, which
had 600 workers, producing 300,000 units daily.

Shortly after 1929, an entrepreneur named Donald F. Duncan recognized the
potential of this new fad and purchased the Flores Yo-yo Corporation and all its
assets, including the Flores name, which was transferred to the new company in
1932 – the same year that the name "Yo-yo" was first registered as a trademark.^.In
1946, the Duncan Toys Company opened a yo-yo factory in Luck, Wisconsin.

The Duncan yo-yo was inducted into the National Toy Hall of Fame at The Strong
in Rochester, New York, in 1999.