In the United States, shredded wheat is most heavily advertised and marketed by Post Consumer Brands, which acquired the product in 1993 through its parent company, Kraft Foods, buying it from its long-time producer Nabisco. Kellogg's sells eight varieties of miniature, or bite-sized, shredded wheat cereal. Manufacturer Barbara's Bakery, a division of Weetabix Limited, also offers a version of plain shredded wheat. In the United Kingdom, the Shredded Wheat brand is owned by Cereal Partners, a Nestlé/General Mills company, although there are many generic versions and variants by different names. It was first made in the United States in 1893, while UK production began in 1926.

Henry Perky invented shredded wheat cereal in Denver, Colorado, in 1890, as well as founding the "Cereal Machine Company". In 1895, Perky received United States Patent Number 548,086, dated 15 October 1895. The biscuits proved more popular than the machines, so Perky moved East and opened his first bakery in Boston, Massachusetts, and then in Worcester, Massachusetts, in 1895, retaining the name of The Cereal Machine Company, and adding the name of the Shredded Wheat Company. Inspired by his observation of a dyspeptic diner blending wheat with cream, he developed a method of processing wheat into strips that were formed into pillow-like biscuits.

The wheat is first cooked in water until its moisture content reaches about 50%. It is then tempered, allowing moisture to diffuse evenly into the grain. The grain then passes through a set of rollers with grooves in one side, yielding a web of shredded wheat strands. Many webs are stacked together, and this moist stack of strands is crimped at regular intervals to produce individual pieces of cereal with the strands attached at each end. These then go into an oven, where they are baked until their moisture content is reduced to 5%.

Perky first sold his shredded wheat cereal to vegetarian restaurants in 1892, distributing it from a factory in Niagara Falls, New York. A health-oriented publication, The Chicago Vegetarian, recommended the use of shredded wheat biscuits as soup croutons. At the same time, Perky leased cereal-manufacturing machines to bakers in Denver and Colorado Springs through his Cereal Machine Company and sold wheat processors.

One of his wheat-processor buyers, Dr. John Harvey Kellogg, admired Perky's manufacturing process for his shredded wheat cereal. Kellogg declined to purchase Perky's patent on it, however, considering it too weak in taste, "like eating a whisk broom." However, after co-founding the Battle Creek Toasted Corn Flake Company—later the Kellogg Company cereal manufacturer—with his brother Will Keith Kellogg in 1906, John Kellogg observed the success of Perky's product and offered to buy its patent from him, but at too low a price to pique Perky's interest.

Premiering to the public at Chicago's World Columbian Exposition in 1893, shredded wheat cereal was then manufactured by The Natural Food Company in Niagara Falls, New York, in 1901. It became the Shredded Wheat Company in 1904. It was bought by Nabisco (National Biscuit Company) in December 1928.

United States production of Shredded Wheat moved to Naperville, Illinois, in 1954, where it is still made. In 1993, Nabisco sold the brand to Kraft General Foods, but it was still under the Nabisco name until 1999, whereupon it was sold under the slogan "Nabisco brought to you by Post."

Canadian production has been at Niagara Falls, Ontario, since 1904 due to nearby hydro-electric power. Shredded Wheat was also produced in Niagara Falls, New York, first at Nabisco's factory on Buffalo Avenue beginning in 1901. In 1954, a new plant on Rainbow Boulevard opened less than a mile away and the Buffalo Avenue factory was sold. Despite being listed in the National Historic Register in 1974, the Buffalo Avenue plant was demolished in 1976. Production continued at the Rainbow Boulevard plant until it was closed in 2001 as production was consolidated on the Canadian side of the border.

In 1920, Henry Perky's son, Scott Henry Perky, developed a round shredded wheat cereal, which he named Muffets. The Muffets Corporation was sold to the Quaker Oats Company in 1927. The cereal is still marketed in Canada as Muffets, but in the U.S. is now sold as Quaker Shredded Wheat.