As Sam said, Lego did wooden toys first, then produced plastic bricks from the 1940s. They started using ABS plastic in 1963, which is apparently what they still use today, 50 years later.
Check out the wiki for Lego's history, and there's some trivia about the History of Lego at the San Diego Legoland (
which I included in my report here - beware, lots of photos).