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In 1967, Carl Paul and his wife Barbara founded Golfsmith in their Edison, N.J. home. Inspired by a custom club maker who had built him a tailor-made set, Carl recognized an unfilled niche in the golf industry: the design and distribution of custom golf clubs and their components, along with instruction about how best to assemble them. Beginning with a typewritten, hand illustrated catalog Golfsmith first became successful by helping transform club repair shops across the country into custom golf club makers.

In the early 1970s, Carl's brother Frank joined the family business, and it moved to Austin, Texas The first Golfsmith storefront was a components showroom housed in 6,000 square feet of unused army barracks. In 1975, the Pauls embarked on their first consumer retail expansion by creating The Golfsmith Store accessory catalog. In 1976, the company first grossed more than $1 million.

Golfsmith operated primarily as a catalog-based business until 1992. That year the company moved to its present headquarters location, a 40-acre campus that includes the corporate offices, a practice range, a 30,000-square-foot Golfsmith store, and 240,000 square feet of shipping and distribution facilities.

Golfsmith's aggressive retail expansion began in 1995 with the opening of retail stores in Houston, Denver and Dallas. Golfsmith's initial public offering of stock was in June 2006. As of August 2010, Golfsmith operated 76 stores in 21 states.