Käthe Kruse was born on September 17, 1883 as Katharina Johanna Gertrud Simon near Breslau (once part of the German Empire, now Poland). After graduating from school, she decided to pursue an acting career; she got her first role the age of 17 at the Lessing Theater in Berlin.
She frequented the capital's artistic and literary scene, where she met the set designer and sculptor Max Kruse. The couple had three daughters, Maria, Sophie and Johanna before they married in 1909.
During her second pregnancy, Käthe moved to Tuscany with her eldest daughter, while Max stayed in Berlin. At Christmas, however, he visited his small family and when his daughter asked for a doll, he quipped back that they were hideous.
Käthe then began to make her own dolls that were soft and realistic and were supposed to be "a child for a child." In 1910 Käthe Kruse, back in Berlin, presented her first handmade dolls at a toy exhibition, where they were enthusiastically received.
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Worldwide orders followed, including one from the well-known FAO Schwarz children's department store in New York City. The company became so successful that it became necessary to move to a large workshop at Bad Kösen on the Saale River in Germany. A legal dispute with the toy company Bing over the copyright of the Käthe Kruse dolls caused a stir in 1925. The entrepreneur won the case; it was the first case over the copyright of a toy.
Käthe Kruse had four sons between 1911 and 1921: Michael, Joachim, Friedebald and Max. With the doll Friedebald, also called Das Deutsche Kind, for which one of her sons was the inspiration, Käthe Kruse brought dolls with real hair onto the market for the first time in 1928. In that year she also revolutionized window displays by setting up life-size dolls (mannequins) in various settings.
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In the years of the Second World War, the company had to struggle with considerable restrictions and a shortage of materials. Personal tragedy followed, with the death of Max Kruse in November 1942 and two sons of her sons killed during the war. When Bad Kösen became part of the Soviet occupation zone in 1950, Käthe Kruse relocated the company headquarters to Donauwörth, with another workshop set up in Bad Pyrmont, also in Germany.
After Käthe Kruse retired, her children took over the management of the company, holding onto Käthe's legacy of dolls made of high quality materials and with lifelike expressions, though the company has been since sold. Käthe Kruse herself received the Federal Cross of Merit 1st Class in 1956 and died on July 19, 1968 in Murnau am Staffelsee, not far from Munich.
Today, Kathe Kruse's original dolls can fetch tens of thousands on the auction market. Her current record was set in 2013 when one of her dolls sold for $65,000 at a German auction house.
