Mr. William Day Gates founded the American Terra Cotta and Ceramic Company in Terra Cotta, Ilinois, in 1881. The Gates Potteries developed as a branch of this company and was set up around 1890 to make plain, undecorated garden pottery. The "Teco" name is derived from the first syllables of the words terra and cotta. The name was used as early as 1895 although the pottery was not available to the public until 1901. The parent company, American Terra Cotta and Ceramic Company (founded in 1881) was sold, five years before William Gates's death in 1935.

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<ref name=CH>{{cite web |url= |title=The Gates Potteries |author=Cooper Hewitt, Smithsonian Design Museum |accessdate=22 October 2020 |publisher=Smithsonian Institution}}</ref>