Jews are first mentioned in Bavaria in the Passau toll regulations of 906. Their settlement was apparently connected with the trade routes to Hungary, southern Russia and northeastern Germany. A Jewish resident of Regensburg is mentioned at the end of the tenth century. The communities which had been established in Bamberg and Regensburg were attacked during the First Crusade in 1096, and those in Aschaffenburg, Wuerzburg, and Nuremberg during the Second Crusade in 1146–47. Other communities existed in the 13th century at Landshut, Passau, Munich, and Fuerth.

The Jews in Bavaria mainly engaged in trade, dealing in slaves, gold, silver and other metals, and in moneylending. In 1276 they were expelled from Upper Bavaria and 180 Jews were burned at the stake in Munich following a blood libel in 1285. The communities in Franconia were attacked during the Rindfleisch persecutions in 1298. The Armleder massacres, charges of desecrating the Host at Deggendorf, Straubing, and Landshut, and the persecutions following the Black Death (1348–49), brought catastrophe to the whole of Bavarian Jewry. Many communities were entirely destroyed, among them Ansbach, Aschaffenburg, Augsburg, Bamberg, Ulm, Munich, Nuremberg, Passau, Regensburg, Rothenburg, and Wuerzburg. Those who had fled were permitted to return after a time under King Wenceslaus. In 1442 the Jews were again expelled from Upper Bavaria. Shortly afterward, in 1450, the Jews in Lower Bavaria were flung into prison until they paid the duke a ransom of 32,000 crowns and were then driven from the duchy. As a result of agitation by the Franciscan John of Capistrano, they were expelled from Franconia. In 1478 they were expelled from Passau, in 1499 from Nuremberg, and in 1519 from Regensburg. The few subsequently remaining in the duchy of Bavaria were expelled in 1551.

Subsequently, Jewish settlement in Bavaria ceased until toward the end of the 17th century, when a small community was founded in Sulzbach by refugees from Vienna. During the War of the Spanish Succession (1701–14) several Jews from Austria serving as purveyors to the army or as moneylenders settled in Bavaria. In this period a flourishing community grew up in Fuerth, whose economic activities helped to bring prosperity to the city. After the war the Jews of Austrian origin were expelled from Bavaria, but some were able to acquire the right to reside in Munich as monopoly holders, Court Jews, mintmasters, and physicians. Several Court Jews belonging to the Frankel and Model families became prominent in Ansbach and Fuerth for a while in the 18th century, particularly because of their services in managing the state's economy.

In the Napoleonic era Jewish children were permitted to attend the general schools (1804), the men were accepted into the militia (1805), the poll tax was abolished (1808), and Jews were granted the status of citizens (1813). However, at the same time their number and rights of residence were still restricted, and only the eldest son in a family was allowed to marry (see Familiants Laws). In 1819 anti-Jewish disorders broke out in Franconia (the "Hep! Hep!" riots). Owing to the continued adverse conditions and the restrictions on families a large number of young Bavarian Jews emigrated to the United States. A second wave of emigrants left for the U.S. in the reaction following the 1848 Revolution. In 1861 the discriminatory restrictions concerning Jews were abolished, and Jews were permitted to engage in all occupations. However, complete equality was not granted until 1872 by the provisions of the constitution of the German Reich of 1871. Certain special "Jewish taxes" were abolished only in 1880. The chief occupation of Bavarian Jews in the 19th century was the livestock trade, largely in Jewish hands. By the beginning of the 20th century Jews had considerable holdings in department stores and in a few branches of industry.

The size of the Jewish population in Bavaria varied relatively little from the Napoleonic era to 1933, numbering 53,208 in 1818 and 41,939 in 1933. A Bavarian Jewish organization, the Verband bayerischer israelitischer Gemeinden, was set up in 1921 and included 273 communities and 21 rabbinical institutions. In 1933 the largest and most important communities in Bavaria were in Munich (which had a Jewish population of 9,000), Nuremberg (7,500), Wuerzburg (2,150), Augsburg (1,100), Fuerth (2,000), and Regensburg (450). At this time the majority of Bavarian Jews were engaged in trade and transport (54.5%) and in industry (19%), but some also in agriculture (2.7% in 1925 compared with 9.7% in 1882). Over 1,000 Jews studied at the University of Bavaria after World War I, a proportion ten times higher than that of the Jews to the general population. Regensburg was a center of Jewish scholarship from the 12th century. Regensburg was the cradle of the medieval Ashkenazi Hasidism and in the 12th and 13th centuries the main center of this school.

The Jews in Bavaria were among the first victims of the Nazi movement, which spread from Munich and Nuremberg. Virulent and widespread anti-Semitic agitation caused the depopulation of scores of the village communities so characteristic of Bavaria, especially after the Kristallnacht in 1938, which was particularly destructive in Bavaria, a hotbed of Nazism and home of many Nazis. The first concentration camp was established at Dachau in Bavaria and many Jews from Germany and other countries in Europe perished there.