With the breakthrough of modernism, various efforts are undertaken to rationalize architecture and building processes using industrial principles. Few architects explore these as intensively as Walter Gropius, the founder of the Bauhaus. Even before World War One, and increasingly in the interwar years, Gropius and a number of colleagues undertake various experiments which manifest in a series of projects, essays, model houses and Siedlungen. These aim at conceptually different goals, i.e. they follow two different categories of industrial logic: first, a flexible construction kit and, second, an assembly line serial production. This article traces the genesis of these two concepts and analyses their characteristics using these early manifestations. Compared to existing literature, this article takes into account hitherto neglected primary sources as well as technological and construction history aspects—allowing for a distinction based not only on theoretical, but also technological and structural characteristics. This article shows that Gropius succeeds in formulating and exploring the two principles in theory and practice as well as drawing conclusions by the end of the 1920s. With them, he contributed significantly to the rationalization of architecture, and his principles have been picked up and developed further by numerous architects since then.