The land on which the Ironworks reside was at one time the property of Lord Abergavenny and was leased in 1787 by three Midlands businessmen, Thomas Hill, his brother-in-law Thomas Hopkins and Benjamin Pratt. Work constructing the Ironworks began immediately and included several "luxury" cottages. Blaenavon Ironworks was the first to be designed as a multi-furnace site from the outset, with three furnaces, calcining kilns, cottages, and a company shop.
Archdeacon Coxe visited Blaenavon during 1798–99 and enthusiastically described the small town as an opulent and increasing establishment, which was surrounded with heaps of ore, coal and limestone. The reason for the growth of Blaenavon from a rural to an industrial community lay in the rich mineral deposits found in the surrounding area, which outcropped at the surface making extraction a relatively cheap process. The iron works demanded a skilled and permanent labour force, which the Eastern Valley of Monmouthshire lacked. Previous iron works at nearby Pontypool, for instance, had relied on charcoal and water.
The nature of the work introduced to Blaenavon was different. The changes involved the coal-using technology and the application of steam power, not used until that time in the Eastern Valley. Skilled workers came mainly from West Wales, Staffordshire, Gloucestershire, Herefordshire, Somerset and Ireland. Unskilled men, often with families came for the promise of work. The population of the district expanded from a little over 1,000 in 1800 to 5115 in 1840 with 61% speaking Welsh and the remainder English.
By 1800 Blaenavon Ironworks contributed greatly to South Wales becoming the foremost iron-producing region in the world. Production at Blaenavon was second only to Cyfarthfa Ironworks in Merthyr Tydfil, the largest iron producer in Wales. Two new furnaces were added over the next decade and in 1804 a forge was constructed in nearby Cwmavon. By 1833 the company owned 430 houses and employed 1000 workers but suffered economic boom-and-bust that accompanied iron-making with wage cuts, strikes and the emergence of "Scotch Cattle".
In 1836, the works was bought by the Blaenavon Iron and Coal Company, financed by Londoner Robert Kennard, later an MP. Led by new managing director James Ashwell, a huge investment was made in the ironworks, including the construction of the impressive Balance tower which utilised a water displacement lift to carry pig iron from the base of the site to the Brecknock and Abergavenny Canal system, which offered lower tolls to Newport than the Monmouthshire Canal. After this £138,000 investment the site showed little sign of profit and so Ashwell was forced to resign in 1840. In the following years, iron rails produced at Blaenavon were exported all over the world, including India, Russia and Brazil but also in projects closer to home such as the construction of Crumlin Viaduct.
When Ashwell resigned, Mr. Scrivener became manager of the works and production picked up for a short while. In 1845 sales reached a peak of 35,549 tons out of which 20,732 tons were sold. This was a rise of 5,000 tons on sales for the previous year. However, fluidity was uncertain. By 1847 sales had declined to 18,981 tons. The works continued to suffer. A lower amount of pig iron was produced in 1849, partly due to the furnaces being out of action for three months. However, it was claimed that this was the consequence of workmen refusing to submit to a reduction in wages, which the depressed state of the iron industry had rendered necessary.
The company was relaunched in 1870 as the Blaenavon Iron & Steel Company and was one of only six south Wales ironworks that successfully made the change to steel production. By 1878 the company employed 5,000 people but had greatly overreached itself financially and failed amongst tough competition. With financial ruin just around the corner the company was given some respite thanks to the discoveries of Sidney Gilchrist Thomas and Percy Carlyle Gilchrist which enabled the use of the previously uneconomic phosphoric iron ore. Their experiments were carried out at Blaenavon between 1877 and 1878. This was short lived as it meant Germany and North America were now able to utilise their own phosphoric ores and ironically accelerated the decline of Blaenavon Ironworks.