Z scale was introduced by the German model train m

Z scale was introduced by the German model train manufacturer Märklin in 1972 at the Nuremberg Toy Fair. It was a brainchild of Helmut Killian, Märklin's head design engineer at the time. Letter Z was chosen to designate the new scale as it was thought at the time that there would not be a commercial model railway scale even smaller than Z, in the future. Hence the last character of the alphabet in German and English languages. Since 1972 there have been some attempts to bring even smaller scales in the market, but they remain niche products without wider following at this time.

In 1978 a Märklin Z scale locomotive pulling six coaches made its entry to Guinness Book of Records by running nonstop 1219 hours and travelling a distance of 720 km before the train stopped.

Z scale at its inception was predominantly a European scale, but it has an increasing number of loyal followers in other parts of the world. There are now manufacturers in North America and Japan, among others. Z scale enthusiasts throughout Europe, North America and Japan participate regularly at most national and regional model railroad exhibitions and shows, where they have demonstrated the outstanding operation and layout design characteristics of the scale.

As early as 1988, Märklin announced their intention to offer digital train control systems in Z scale and Märklin's 1988 Z scale product catalog listed three locomotives with a built-in digital decoder. Unfortunately, the technology was not developed enough and the manufacturer had to cancel these plans mainly due to heat dissipation problems of locomotive decoders. Since then, these problems have been solved, and Z scale has embraced advanced electronics. An increasing number of modellers have converted their locomotives to use third party digital train control systems. The most popular digital system in Z scale is the NEM standard, Selectrix, which offers the smallest decoders in the market with thicknesses of less than 2 mm. The universally popular Digital Command Control (DCC) has also its followers in Z scale. There are drop-in decoders available from various companies today, and some of them replace the lighting printed circuit boards of recent diesel or electric locomotives.

While still considered to be a curiosity by some, Z scale is now a legitimate, mature modelling scale. However, Z scale rolling stock, buildings and figures remain still somewhat less widespread and higher-priced than their counterparts in more popular HO scale, OO scale, and N scale.