Z scale was introduced by the German model train manufacturer Märklin in 1972 at the Nuremburg toy fair. It was the brainchild of Helmut Killian, Märklin’s head design engineer at the time. The letter Z was chosen to designate the new scale, as it was thought, at the time, that there would not be a commercial model railway scale even smaller than Z, in the future – hence, the last character of the alphabet in the German and English languages. Since 1972, there have been attempts to bring even smaller scales to the market, but they remain niche products without a wider following at this time (the largest market being T gauge at 1:450 Scale, aka 3 mm Scale, designed in Japan and manufactured in China).

In 1978, a Märklin Z scale locomotive pulling six coaches made its entry into the Guinness Book of World Records by running nonstop 1,219 hours, and travelling a distance of 720 km before the train stopped due to failure of the motor.

Z scale, at its inception, was predominantly a European scale, but it has an increasing number of loyal followers in other parts of the world. There are now also manufacturers in North America and Japan/China, among others. Z scale enthusiasts throughout Europe, North America, and Japan participate regularly at most national and regional model railroad exhibitions and shows, where they have demonstrated the outstanding operation and layout design characteristics of the scale. While prices were initially higher for Z scale products (particularly locomotives) compared with those available in larger scales, as volume production, computer-aided design and manufacturing techniques, and the number of competing manufacturers have increased, prices have come down to a point comparable to those of high-quality models in any scale. In Z scale, there are no cheap, low-precision models as can be available in larger scales – if they weren’t designed and manufactured to high standards of precision, they wouldn’t run at all.

As early as 1988, Märklin announced their intention to offer digital train control systems in Z scale, and Märklin’s 1988 Z scale product catalog listed three locomotives with a built-in digital decoder. Unfortunately, the technology was not developed enough, yet, and the manufacturer had to cancel these plans, mainly due to heat dissipation problems in locomotive decoders. Since then, these problems have been solved, Z scale has embraced advanced electronics (e.g., microprocessors originally developed for cell phones, surface-mount technology, etc.), and an increasing number of modellers have converted their locomotives to use third party digital model train control systems.

The first attempts to use digital system in Z scale were based on NEM standard, Selectrix, which offered the smallest decoders in the market, with thicknesses of less than 2 mm. German company Müt brought also the first digital control central unit designed specially for z-scale in the market in the early 2000s. Use of the universally popular National Model Railroad Association (NMRA) Digital Command Control (DCC) standard has expanded substantially in Z scale recently as locomotive decoders with sizes comparable to the sizes of smallest Selectrix decoders have become available.

Z scale is now a legitimate, mature modelling scale, with model locomotives, rolling stock, buildings, signalling and human/animal figures becoming available in increasing numbers from an expanding variety of established and particularly smaller, fast-growing manufacturers. Z scale layouts have been winning local, regional, and national level competitions, such as Best of Show at the NMRA National Train Show (NTS) in July, 2001 in St. Louis, MO.