SK was founded as the Sherman-Klove Company, specializing in screw-machine products, by Mason H. Sherman and Roger Klove. The company was founded in the early 1900s to supply munitions in WWI, and made mortar housings in a screw machine plant on Harrison Street in Chicago.

During the 1920s SK operated primarily as a contract company, making tools for other companies including Craftsman. Business thrived, they made specialty screw machine products that did well until the depression. William S. Sherman (W.S.), Mason's son, came to SK after graduating college in 1927 and was eventually a major owner of the company. One of the products the company made was socket wrenches for Hinsdale Socket and Wrench Company. The Hinsdale Company went out of business during the great depression leaving Sherman-Klove with a large inventory of this product, they then redesigned the product and changed the company name to S-K Tools.

Theodore Rueb, an engineer for the Sherman-Klove Company, went on to develop a new mechanism for a very successful line of ratchets, scaled from 1/4-drive up to 3/4-drive. The "round-head" ratchet has remained one of the most popular ratchet styles in the seven decades since S-K's first development, and many modern ratchets are little changed from the earliest design. SK invented and received a patent for the round head ratchet wrench, which remains a mainstay of their, and every major competitor's product line today.

SK is a subsidiary of IDEAL Industries, Inc.