A settlement was in existence already in the fifth century AC. By 1186 Gmunden was a fortified town surrounded by walls, although it did not receive a church until about 1300. On November 14, 1626 an army of rebellious peasants was completely defeated at Gmunden by General Pappenheim, who had been ordered by Maximilian I to suppress the peasant rebellion in Upper Austria. The dead peasant insurgents were buried in nearby Pinsdorf, where an obelisk styled memorial known as the Bauernhügel in their honour can still be seen.
Gmunden supplied battleships to Austria during the 17th century and helped wounded soldiers in hospitals in World War I. During World War II, an SS maternity home was located here, "to insure racial purity" in accordance with Nazi racial theories
