James Knott helped build a better lobster trap.

Though the world didn’t beat a path to his door in Northbridge, Mass., Mr. Knott eventually persuaded most manufacturers of lobster traps to use his product—plastic-coated wire mesh—rather than wood to make their devices.

Nearly four decades ago, the Harvard-trained entrepreneur paid about $90,000 for an abandoned mill on the banks of the Blackstone River that made bayonets during the Civil War. He converted it to production of coated wire, used in fences and chicken coops as well as for catching lobsters.

He built a business, Riverdale Mills Corp., that employs more than 150 people and has withstood price competition from China and a 1997 raid by pistol-packing agents of the Environmental Protection Agency. Then came an indictment alleging Mr. Knott violated the Clean Water Act by dumping acidic wastewater. He fought back, providing evidence that the EPA had doctored water-test results. The charges were dropped.

“What am I supposed to do—lay down and get stomped on?” he asked in a 2001 interview with the television news show “60 Minutes.”

He was an irascible manager whose clashes with his sons led all three of them to quit the company at various times. Even so, he managed to turn over the top job at Riverdale to one of those sons, James Knott Jr. , in 2015.

Mr. Knott, who was 88 years old, died Aug. 16 at home in Whitinsville, Mass.

His interest in lobsters dated to his teenage years, when he fished for them near his family’s summer cottage in Gloucester, Mass. He recalled hauling 125-pound wooden lobster traps up from the ocean floor—and credited that exertion for the upper-body strength that helped him as a high school wrestler.

James Milne Knott was born Dec. 18, 1929, in Brighton, Mass. His father sold cigars and later Westinghouse home appliances.

The younger Mr. Knott studied mechanical engineering at Northeastern University for a year. After deciding engineering wasn’t for him, he enrolled at Harvard College, where he earned an economics degree in 1954.

He served in the U.S. Army at bases in Texas and Oklahoma, where he was responsible for maintenance of vehicles.

He then founded Coatings Engineering Corp. in South Natick, Mass., to make plastic coatings for products ranging from pliers to stethoscopes. He sold that business six years later but continued managing it for the new owners, Gilbert & Bennett Manufacturing Co. In 1978, when Gilbert & Bennett tried to reduce his autonomy, he left to form his own company.

Since the mid-1960s, Mr. Knott had been tinkering with designs for wire lobster traps. The traditional wooden traps were buoyant and needed to be weighed down with bricks or rocks to sink. Once immersed, they became waterlogged and extremely heavy. They also wore out more quickly than metal cages.

With his new company, Riverdale, Mr. Knott decided to promote coated wire material for traps. First he had to renovate the mill, which had been used for coating gift-wrapping paper until closing down a few years earlier. He plugged the leaky roof and replaced rotting floorboards and broken windows. He also restored an 80-year-old water wheel to generate electricity at the plant.

The business prospered for years but began to suffer in the early 2000s amid tougher import competition. Pike Bartlett, who owned a firm making lobster traps, was a major customer but began buying some of his wire from Italy. Mr. Knott retaliated by refusing to sell wire to Mr. Bartlett.

When he was indicted by a federal grand jury in the water-pollution case in 1998, Mr. Knott faced a possible prison term of six years. He hired a retired FBI handwriting analyst, who found EPA test records had been altered to show an illegal degree of acidity in the wastewater. The government soon dropped its charges.

Mr. Knott fought a long and ultimately fruitless battle to require the government to reimburse him for his legal costs.

As foreign competition grew, one of Mr. Knott’s sons, Andrew, studied lean manufacturing and teamwork practices pioneered by Toyota Motor . He urged his father to adopt some of those techniques, but the elder Mr. Knott wasn’t enthusiastic about his son’s ideas, and Andrew Knott left the business in 2007. “He didn’t want to give up control,” Andrew Knott said.

James Knott Jr. also left the firm after disagreements with his father but later returned when his mother asked him to help shape up the business, he said. Mr. Knott Jr. is now CEO.

Mr. Knott Sr.’s wife of 67 years, Betty, died in February. He is survived by four children and four grandchildren.

Though known as a fighter, he could be tenderhearted. After finding that a stray cat had been shot with a BB gun near the mill around 10 years ago, Mr. Knott paid for veterinary surgery and then kept the crippled animal in his office.