The oldest toy retailer in the United States, FAO Schwarz, is now owned by Toys R Us.
FAO Schwarz has faced competition from discount stores in recent years, and filed for bankruptcy twice in 2003.
Toys R Us said it would continue to operate FAO Schwarz's two stores in New York and Las Vegas. It did not disclose how much it paid for the company.
Founded in 1862, FAO Schwarz was immortalised in the film Big when Tom Hanks played on a giant floor piano. It is best known for its upmarket selection of toys.
The company's website and catalogue will continue to use the FAO Schwarz name.
The BBC reports Toys R Us is the world's largest toy and baby products retailer. It has more than 1500 stores in 32 countries.
