A previous restaurant in the spot, Wampetich, opened in 1894. In 1910, Károly Gundel took over the Wampetich’s lease and operated the restaurant. His son János Gundel, who had learned the hospitality trade at other hotels and restaurants, took over the restaurant’s management. He created a dramatic and luxurious style that increased its popularity and created an international reputation.

In 1939, the restaurant did the catering for the Hungarian contingent at 1939 World’s Fair in New York City. In 1949, the restaurant was nationalized and operated by state company Hungar Hotels, but it was reopened by Americans Ronald S. Lauder and George Lang in 1992. Consultants Adam Tihany and graphic artist Milton Glaser assisted in its design.