(FORTUNE Small Business) – Brunswick is the company that gave Americans play. First with billiards, then bowling, and now with pleasure boats, it capitalized on early America's budding interest in leisure activities and has built on it ever since. It's the world's largest recreation company, generating more revenue from its pool tables, bowling products, and boats than any of its competitors. It's Paul Newman as "Fast Eddie" Felson in The Hustler, Ralph Kramden bowling a few games after driving a bus all day, and a weekend on the lake, with a cooler full of Bud and the sky dappled with light so you don't even care if the fish aren't biting.

These leisure-time sports are ingrained in the popular culture largely because of the family that ran Brunswick for four generations. They reinvented billiards and bowling from pastimes in fancy parlors to the sports of gritty taverns to suburban everyman activities. And they recognized the appeal of water recreation in the rising affluence of the 1950s, setting the stage for the company's next phase, which is its focus today. But the business was built on the Runyonesque charms of billiards and bowling, which, although imported from Europe, are now quintessentially American.

Billiards was still a fairly new game in America in 1845 when a 26-year-old Swiss immigrant named John Moses Brunswick first encountered it. He had settled in Cincinnati five years earlier and had quickly become a leader in the city's civic and business communities as a successful carriage maker. At a dinner party among friends one night, the host took Brunswick aside to show him his billiard table. The table's consummate craftsmanship and ornate detailing transfixed Brunswick. He had always been flexible in his trade and prided himself on his work, saying, "If it is wood, we can make it, and we can make it better than anyone else." Thus inspired, his shop turned out its first billiard table within a few months. Satisfied customers spread the word of Brunswick's elaborate handiwork, and he was receiving orders from across the nation within two years of his entrance into the business. Seeing the opportunity to expand, he established sales offices, complete with large billiard parlors, in Chicago in 1848, New Orleans in 1852, and St. Louis in 1859. By this time he had abandoned carriages altogether and was concentrating on billiards. And not just on the game's tables but also on its balls and cues. Most billiards equipment of the time was crude and unreliable, and Brunswick acquired slate quarries and lumberyards to control the quality of his raw materials and keep them away from competitors. He even developed a rubber-engineering division to improve table cushions. As it happened, Brunswick had moved into billiards just as the game gained popularity. By 1884, Brunswick had merged with its two primary rivals, creating a $1.5 million monolith that was not only the largest billiards equipment operation in the world but larger than all its competitors combined.

John Brunswick died two years later, but his son-in-law Moses Bensinger, who had been groomed to take over the company by Brunswick, became president in 1890 after a brief interregnum. As Moses's son Benjamin later recalled, "I remember the great pains he took to see that we were open-minded," and that attitude spurred a course of synergistic expansion that still characterizes the company. Noting that taverns and saloons had become the primary outlets for billiard tables (as opposed to private homes of the wealthy, who were John Brunswick's typical customers), Bensinger, who was 51 when he took over, wondered if there might be a market for Brunswick bars and for back-of-the-bar fixtures. The venture started as custom work, but demand soon proved so great that the company began to mass-produce them. As waves of immigrants packed into American cities in the 1890s, more and more taverns opened, increasing the market for Brunswick billiard tables and bar fixtures alike. (The bars, which originally sold for $500, now fetch about $50,000, and about 150 of them remain in service at places like Coogan's in Chicago and Sullivan's in Omaha.)

By 1912 the backlash of the temperance movement led Benjamin Bensinger, who took over from his father in 1904, to pull out of making bars, which at the time represented $4 million in annual revenues and 25% of the company's business. Billiards' booming sales--table sales peaked in 1913 at 15,000, at up to $650 each--gave him the freedom to experiment with other markets for the company. "It would have been the plainest folly to go on manufacturing more bars," he said, anticipating Prohibition, which arrived in 1919. "We immediately looked around for some other business." Benjamin plumbed the natural extensions of his company's woodworking and rubber-engineering skills and produced a number of short-term hits for the business, ranging from decorative phonographs to auto tires to the world's first rubber toilet seat in 1912, the Whale-Bone-Ite. (Don't laugh: It did huge business with hotels, hospitals, and the Pullman Sleeping Car Co.)

The onset of the Depression, however, signaled the beginning of the marginalization of billiards at the company. And Benjamin's sons Bob and Ted--who managed the company after 1930--couldn't improve billiards' image, which had been hurt during the 1930s as large numbers of unemployed men hung out in pool halls all day. As Fortune put it in a 1959 profile of the company, "Over the years, the public practice of the game had become so closely identified with slack-jawed delinquents, bookies, and other unsavory types that it proved impossible to make it respectable." In 1958 the company sold fewer than 2,000 tables, at an average of $750 each. The last glimmer for billiards was the release in 1961 of the movie The Hustler, starring Paul Newman and Jackie Gleason, which led to an increase in the number of new pool rooms, some of which Brunswick tried to brand as "family billiard centers." But Brunswick's efforts to make pool a family game failed, and by 1970 the boom was bust. Billiards, the foundation on which Brunswick was built, would no longer play a significant role in its operations.

Brunswick's influence on bowling was even greater than on billiards, and its history follows a similar trajectory. The saloons that were the company's best customers for bar fixtures and billiards supplies in the late 1800s soon started adding bowling lanes in their basements. "Bowling was purely a gimmick, a marketing ploy by saloon owners to augment beer sales and attract new patrons," says Andrew Hurley, author of Diners, Bowling Alleys, and Trailer Parks (2001). Moses Bensinger saw these lanes in his customers' establishments and recognized their popularity. Bowling was a wood-centered sport (even the balls were wooden in those days), so he saw no reason Brunswick couldn't compete in that arena as well. Soon the company was producing pins, balls, and lane surfaces.

Bowling at the time suffered from a hodgepodge of rules and guidelines, and Bensinger, who, incidentally, was an average bowler at best, believed that standardization was the key to the sport's growth. In 1895 he was part of the group that organized the American Bowling Congress. Bensinger also lobbied hard for the creation of a national bowling championship, which came to fruition with the first ABC tournament in 1901. Brunswick has continued to sponsor bowling tournaments in its close association with the sport.

Although Prohibition separated bowling from bars, and freestanding alleys sprouted up, Brunswick had a long fight ahead to elevate the status of the sport. According to The New York Times, before World War II, "many bowling places had reputations as hangouts for rugged characters who kept the air above the lanes blue with tobacco smoke and rough language." Bowling's image wasn't that bad, despite what the Times said, "but it needed a little polishing anyway," said Bob Bensinger. Brunswick started a substantial ad campaign designed to make the sport suitable for families. As early as 1940, Brunswick encouraged bowling alley owners to prohibit drinking while bowling, and by the next decade, velvety cocktail lounges separate from the lanes were the norm. And throughout the 1940s and '50s, Brunswick helped bowling alley operators streamline lanes, add color, install new chairs to replace old wooden spectator benches, and create cheerful settings. "It was the era of Disneyland," says Hurley. "Brunswick fit bowling into the cultural ideals of the 1950s." The company also offered financial aid to bowling proprietors to update lanes and construct recreation centers, converting alleys into "the people's country clubs," which included everything from children's day care to swimming pools.

The development of the automatic pinsetter coalesced with Brunswick's other efforts to make bowling a sport safe for women and children. Although American Machine & Foundry (AMF) produced the first automatic pinsetter in the early 1950s, Brunswick, under the leadership of Ted Bensinger, Bob's younger brother, used its already close relationship with bowling-center owners to win the pinsetting war. Brunswick got them to wait for its product to be ready, and then sold its expensive machinery--on the installment plan--instead of leasing it like AMF. The impact on business was dramatic: In 1954, Brunswick had reached $33 million in revenues and $700,000 in profits, but by the peak of the bowling frenzy in 1961, revenues would climb to $422 million, with $45 million in profits. The number of bowlers was up from about ten million in 1946 to 26 million in 1959, with seemingly no end in sight as to how big it could become. Meanwhile, Brunswick's stock soared, and Ted Bensinger, who preferred fishing to bowling, used it as currency to build the "General Motors of sports," acquiring MacGregor sporting goods, Zebco fishing reels, and the manufacturer of Mercury outboard motors, among others.

But bowling still provided 60% of the company's earnings, and when overdevelopment led to market saturation in 1962, bowling recreation centers slid into the gutter. Because owners owed Brunswick so much money, the company found itself dragged down with them. By 1963, the company reported a loss of $10 million. Ted Bensinger stepped aside as president, bringing in the first outsider to run Brunswick, but Bob and Ted sat on the board into the 1970s.

There has yet to be another innovation like the pinsetter to draw curiosity seekers to bowling, or a celebrity to glamorize billiards again. But entrepreneurs are trying to revive professional bowling by adding professional wrestling's swagger, and pool is still a popular pastime. The two sports make up about 12% of Brunswick's revenues, out of a total $3.7 billion last year and about 9% growth. Now, if only Paul Newman would make a speedboat movie ...