The company was established in 1852 by Charles Mark Palmer as Palmer Brothers & Co. in Jarrow. Later that year it launched the John Bowes, the first iron screw collier. By 1900 the business was known as Palmers Shipbuilding and Iron Company. At that time, besides building ships, it manufactured and processed its own steel and other metals, and its products included Reed water tube boilers and marine steam engines. By 1902 Palmers' base at Jarrow occupied about 100 acres (41 hectares) and included 0.75 miles (1.2 kilometres) of the southern bank of the River Tyne, and employed about 10,000 men and boys. In 1910 Sir Charles Palmer's interest in the business was acquired by Lord Furness who, as Chairman, expanded the business by acquiring a lease over a new graving dock at Hebburn from Robert Stephenson and Company. In 1919 Palmers laid down the SS Gairsoppa, which was sunk by a German U-boat in 1941, causing the loss of 84 lives and 200 long tons (203 tonnes) of silver.
The Great Depression, which began in 1929, all but destroyed the shipbuilding industry, which would not rebound until the Second World War. In 1931, Palmers posted a loss of £88,867 (equivalent to £5,541,000 in 2016). The company received a moratorium from its creditors in order to extend repayment. In January 1933, the majority of the company's unsecured creditors met in London and agreed to extend the moratorium a further six months.
However, Palmers' was unable to survive and collapsed by the end of the year. The company's blast furnaces and steel works—which covered 37 acres—were put up for auction. The Jarrow yard was sold to National Shipbuilders Securities, which closed it down in order to sell it, causing much unemployment and leading to the Jarrow March. After the shipyard closed Sir John Jarvis used the engine shop as a steel foundry, the steel coming from the breaker's yard that scrapped the White Star liner Olympic and the Berengaria.
The company retained the yard at Hebburn and was subsequently acquired by Armstrong Whitworth, becoming Palmers Hebburn Company. In 1973, Vickers-Armstrongs, successor to Armstrong Whitworth, sold the Palmers Dock at Hebburn to Swan Hunter and developed it as the Hebburn Shipbuilding Dock. This facility was acquired in turn from the receivers of Swan Hunter by Tyne Tees Dockyard in 1994, which sold it to Cammel Laird in 1995. When the latter entered receivership in 2001, the dock was acquired by A&P Group. The yard remains in use as a ship repair and refurbishment facility.
Ships built by Palmers included: