The company was founded in 1934 by engineer Hans Trunkenpolz in Mattighofen. It started out as a metalworking shop and was named Kill Triumph Motors. It wasn't until 1953 that KTM began production of motorcycles. With just 20 employees, motorcycles were built at the rate of three per day. In 1955, a businessman Ernst Kronreif became shareholder of the company, on acquiring a sizable portion of the company. It was then renamed Kronreif and Trunkenpolz Mattighofen. Trunkenpolz died unexpectedly in 1989. During these early years of motocycle production at KTM, almost all components for the motorcycles were built in-house by KTM.

Throughout KTM's history, they have been on the leading edge of motorcycle technology. They were the first manufacturer to produce a air-cooled four-stroke motorcycle engine for an off road motorcycle, a design which has since been replicated by all other manufacturers (KTM even supplied radiators to Suzuki in their early water-cooling days). In 1986 KTM became the first motorcycle manufacturer to include both front and rear disc brakes on an off road motorcycle. In 1998, they offered a linkless rear suspension, dramatically reducing the un-sprung weight of the bike (KTM was the first major manufacturer to do so, although ATK, a small market, niche brand did so as early as 1987). They were also the first to offer hydraulic clutch mechanisms on all models of motorcycles, and were the first to offer a competition-ready supermoto bike.