It was founded in 1905 as a joint venture of Vickers and Terni Steelworks, Cantiere navale fratelli Orlando and Cantieri navali Odero. Investment was also provided by Giuseppe Orlando and Attilio Odero. During World War I, Vickers Terni produced many weapons with calibre 40 mm and upwards. In 1929 the company was renamed Odero Terni Orlando with the abbreviation OTO. During World War II, mostly heavy guns for battleships were produced.
In 1953 the company took the name OTO Melara.
Before Italy joined NATO, OTO Melara produced civil products, like tractors and looms, but quickly returned to the production of weapons. On 1 December 2001, the naval artillery division of OTO Melara merged with that of Breda Meccanica Bresciana to form Otobreda. The combined entity produces the DARDO CIWS, Otobreda 76 mm and Otobreda 127/54 Compact naval guns. OTO Melara's land defence operations are part of the Finmeccanica conglomerate.
Vehicles manufactured include: