Started in Berlin in 1906 as a subsidiary of Henri Jeannin's automobile business, Argus Motoren company spun off entirely in November 1906. Their early products were car and boat engines, but later that year they were contracted to produce engines for the French airship, Ville de Paris, supplying them with a converted boat motor. They turned increasingly to the aviation market, and were widely used by 1910, receiving an order from Sikorsky for one of his large airplanes under construction in Russia. During World War I Argus produced engines for the German army and air corps.

After World War I the company manufactured automobile engines and acquired a majority interest in Horch Automobile in 1919. In 1926 they resumed aircraft engine design, producing a series of inverted inline and V engines. Although all were at the "low-power" end of the market by the start of World War II, they saw extensive use in training aircraft and other utility roles. Most famous of these designs are the Argus As 10, used in the Fieseler Fi 156 Storch, in the Arado Ar 66 and in the Focke-Wulf Fw 56 Stösser; and the Argus As 410, used on many German trainers, including the Arado Ar 96 and the Focke-Wulf Fw 189.

Argus provided also disc brakes, patented by Hermann Klaue (1912-2001), for the Arado Ar 96 landing gear and the Tiger I tank drive train.

The Berlin-Reinickendorf subcamp of Sachsenhausen concentration camp provided labor for the Argus-Werke.[