The company was founded in 1939 in Pfaffenhausen, Germany as "Auto Ruf" by Alois Ruf Sr. as a service garage and was eventually expanded to include a full-service gas station in 1949. Ruf began experimenting with vehicle designs of his own in the late 1940s, and in 1955 designed and built a tour bus, which he marketed around Germany. The positive response it received led to Ruf expanding his business again by starting his own separately owned bus company.
Alois Sr.'s involvement in the car industry had a distinct effect on his son, Alois Ruf Jr., who became a sports car enthusiast. In 1960, Alois Jr. began servicing and restoring Porsche automobiles out of his father's garage. Following Alois Sr's. death in 1974, 24-year-old Alois Jr. took control of the business and focused on his passion: Porsche vehicles, and especially the 911. A year later in 1975, the first Ruf-enhanced Porsche came to life.
Ruf debuted their first complete model in 1977, a tuned version of Porsche's 930 with a stroked 3.3 litre motor. This was followed in 1978 by Ruf's first complete non-turbo Porsche, the 911 SCR. It was a naturally aspirated 911 with a stroked 3.2 litre motor producing 217 horsepower. Numerous customer orders were placed for this vehicle.
The 1987, Ruf released Ruf CTR, which achieved a top speed of 339 km/h (211 mph) in April 1987 and set the record as the world's fastest production car for its time; in 1988 it even reached 342 km/h (213 mph). Its successor, the 1995 Ruf CTR2, had clocked a top speed of 350 km/h (217 mph), making it for a brief moment the fastest road-legal production car in the world in the mid '90s, until the McLaren F1 broke the record in 1998 at 241 mph, thus making the CTR2 the second-fastest production car of the decade. However, the CTR2 cost only a fraction of the price of the F1.
In April 2007, Ruf released the new CTR3 to celebrate the company's new plant in Bahrain, and as a 20th anniversary celebration of the original CTR and successor to the CTR2. The Ruf CTR3 was designed and engineered in a partnership with the Canadian engineering firm Multimatic. The Ruf CTR3 was Ruf's first entirely unique model, built using their own chassis and body. The CTR3 differs from typical Ruf models in that it uses a Mid-engine design, as opposed to the 911's Rear-engine design. Automotive journalists have compared it to the Porsche 911 GT1, which similarly used a mid-engine layout with a body designed to resemble the Porsche 911.