Abraham Darby II, son of the blast furnace innovator, managed to convert pig iron to bar iron in 1749, but no details are known of his process. The Cranage brothers, also working alongside the River Severn, allegedly achieved this experimentally by using a coal-fired reverbatory furnace, in which the iron and the sulphurous coal could be kept separate but it was never used commercially. They were the first to hypothesise that iron could be converted from pig iron to bar iron by the action of heat alone. Although they were unaware of the necessary effects of the oxygen supplied by the air, they had at least abandoned the previous misapprehension that mixture with materials from the fuel were needed. Their experiments were successful and they were granted patent Nº851 in 1766, but no commercial adoption seems to have been made of their process.
In 1783, Peter Onions at Dowlais constructed a larger reverbatory furnace. He began successful commercial puddling with this and was granted patent Nº1370. The furnace was improved by Henry Cort at Fontley in Hampshire in 1783–84 and patented in 1784. Cort added dampers to the chimney, avoiding some of the risk of overheating and burning the iron. Corts process consisted of stirring molten pig iron in a reverberatory furnace in an oxidising atmosphere, thus decarburising it. When the iron "came to nature", that is, to a pasty consistency, it was gathered into a puddled ball, shingled, and rolled (as described below). This application of grooved rollers to the rolling mill, to roll narrow bars, was also Corts adoption of existing rolling mills on the Continent. Cort's efforts to license this process were unsuccessful as it only worked with charcoal smelted pig iron. Modifications were made by Richard Crawshay at his ironworks at Cyfarthfa in Merthyr Tydfil, which incorporated an initial refining process developed at their neighbours at Dowlais.  
Ninety years after Cort's invention, an American labor newspaper recalled the advantages of his system:
Corts process (as patented) only worked for white cast iron, not grey cast iron, which was the usual feedstock for forges of the period. This problem was resolved probably at Merthyr Tydfil by combining puddling with one element of a slightly earlier process. This involved another kind of hearth known as a refinery or running out fire. The pig iron was melted in this and run out into a trough. The slag separated, and floated on the molten iron, and was removed by lowering a dam at the end of the trough. The effect of this process was to desiliconise the metal, leaving a white brittle metal, known as finers metal. This was the ideal material to charge to the puddling furnace. This version of the process was known as dry puddling' and continued in use in some places as late as 1890.
An additional development in refining gray iron was known as wet puddling, also known as boiling or pig boiling. This was invented by a puddler named Joseph Hall at Tipton. He began adding scrap iron to the charge. Later, he tried adding iron scale (in effect, iron oxides such as FeO, , or ). The result was spectacular in that the furnace boiled violently, producing carbon monoxide bubbles. This was due to a chemical reaction between the iron oxides in the scale and the carbon dissolved in the pig iron: . To his surprise, the resultant puddle ball produced good iron.
One big problem with puddling was that up to 15% of the iron was drawn off with the slag because sand was used for the bed. Hall substituted roasted tap cinder for the bed, which cut this waste to 8%, declining to 5% by the end of the century.
Hall subsequently became a partner in establishing the Bloomfield Iron Works at Tipton in 1830, the firm becoming Bradley, Barrows and Hall from 1834. This is the version of the process most commonly used in the mid to late 19th century. Wet puddling had the advantage that it was much more efficient than dry puddling (or any earlier process). The best yield of iron achievable from dry puddling is one ton of iron from 1.3 tons of pig iron (a yield of 77%), but the yield from wet puddling was nearly 100%.
The production of mild steel in the puddling furnace was achieved circa 1850 in Westphalia, Germany and was patented in Great Britain on behalf of Lohage, Bremme and Lehrkind. It worked only with pig iron made from certain kinds of ore. The cast iron had to be melted quickly and the slag to be rich in manganese. When the metal came to nature, it had to be removed quickly and shingled before further decarburization occurred. The process was taken up at the Low Moor Ironworks at Bradford in Yorkshire (England) in 1851 and in the Loire valley in France in 1855. It was widely used.
The puddling process began to be displaced with the introduction of the Bessemer process, which produced steel. This could be converted into wrought iron using the Aston process for a fraction of the cost and time. For comparison, an average size charge for a puddling furnace was  while a Bessemer converter charge was  (13,600 kg). The puddling process could not be scaled up, being limited by the amount that the puddler could handle. It could only be expanded by building more furnaces.