The first Hungarian Grand Prix (Hungarian: Magyar Nagydíj) was held on June 21, 1936 over a 3.1-mile (5.0 km) track laid out in Népliget, a park in Budapest. The Mercedes-Benz, Auto Union, and Ferrari teams all sent three cars and the event drew a very large crowd. However, politics and the ensuing war meant the end of Grand Prix motor racing in the country for fifty years.

A major coup by Bernie Ecclestone, the 1986 Hungarian Grand Prix was the first Formula One race to take place behind the Iron Curtain. Held at the twisty Hungaroring near Budapest, the race has been a mainstay of the racing calendar. Run in the heat of a central European summer, it also holds the distinction of being the only current Grand Prix venue that had never seen a wet race up until the 2006 Hungarian Grand Prix. The first Grand Prix saw 200,000 people spectating, although tickets were expensive at the time. Today, the support is still very enthusiastic, particularly from Finns..

Due to the nature of the track, narrow, twisty and often dusty because of under-use, the Hungarian Grand Prix is associated with processional races, with sometimes many cars following one another, unable to pass. Thierry Boutsen demonstrated this perfectly in 1990, keeping his slower Williams car in front of champion-elect Ayrton Senna, unable to find a way by. The secret to a winning performance at Hungaroring, as well as qualifying well, is pit strategy, best demonstrated in 1998, where Michael Schumacher's Ferrari team changed his strategy mid-race before Schumacher put in one of his finest drives to build up a winning margin after all the stops had been made. Passing is a rarity here, although the 1989 race saw a famously bullish performance from Nigel Mansell in the Ferrari, who started from 12th on the grid and passed car after car, finally taking the lead in splendid opportunist style when Ayrton Senna was baulked by a slower runner. The circuit was modified slightly in 2003 in an attempt to allow more passing.

Other notable occasions in Budapest include first Grand Prix wins for Damon Hill in 1993, Fernando Alonso (in 2003), the first Grand Prix winner from Spain, who also became the youngest ever driver to win a GP and Jenson Button in an incident-packed race in 2006. Also noteworthy is Damon Hill's stunning near win in the unfancied Arrows-Yamaha in 1997, when his car lost drive on the last lap causing him to coast in second place.

In 2001, Michael Schumacher equalled Alain Prost's then record 51 Grand Prix wins at the Hungaroring, in the drive which also secured his 4th World Title.

The 2006 Grand Prix was the first to be held here in wet conditions. It also saw Mansell's seventeen-year-old record of winning from 12th broken, as Button took his victory from 14th place on the grid.