The history of the Zsolnay factory dates back to 1851. In that year, Miklós Zsolnay senior bought his first plot of land, including a brick kiln and a clay-field. Since Ignác's son spent a year in Lukafa to learn the production of earthenware, work could not begin until 1853, and the caring father soon afterwards registered the factory in Ignác’s name. Ignác enthusiastically managed the small manufactory for many years, but his financial difficulties meant that he was supported by loans from his brother Vilmos (1828-1900), who later entered the business as a silent partner, but when Ignác left the country, the business was left to Vilmos.

Vilmos had artistic ambitions as a young man, he was skilful in painting and drawing, but was persuaded by his parents to become a merchant. He studied in Vienna and then worked as a merchant's assistant. A man of talent, Vilmos recognised the need for mechanisation to increase production efficiency and bought a steam engine. In 1868, he registered his company under his own name, "First Cement, Fireclay and Fireproof Pottery Factory of Pécs". Vilmos, lacking expertise, initially relied on the help of others, but he soon realised on his own that he could only make a success of his small factory if he continuously developed it on a large scale. From the 1870s onwards, he paid increasing attention to the development of new materials and techniques, for example, he developed the 'porcelain-faience' for the production of decorative works and sophisticated tableware between 1874 and 1878.

The manufactory produced architectural ceramics from the beginning, but the real boom came in the second half of the 1870s. The first major commission of the factory was for the Várbazár (Castle Bazaar) designed by Miklós Ybl, but it also had a strong working relationship with Imre Steindl. Pyro-granite was first used on the Parliament building designed by Steindl. Pyro-granite is a collective name for the 'Zsolnay ceramic types' developed in the early 1880s. The prefix 'pyro' refers to the burning at high temperatures, 'granite' to the strength and durability of the products. Ödön Lechner, the most famous artist of the Hungarian Art Nouveau, used Zsolnay ceramics on buildings such as the Geological Institute, the Museum of Applied Arts and the Post Office.

Under the guidance of Vilmos Zsolnay's son Miklós (1857-1922), the ivory glaze was created in 1875, and his daughters Júlia and Teréz were actively involved in the design of new decorative and commodity goods. Together with her sister Júlia (1856-1950), Teréz (1854-1944) amassed a vast collection of folk art, and Teresa's work, as of the 1870s and 1880s, was mainly inspired by these pottery and textile products. Júlia's interest in painting may also have broadened, and it was thanks to her that the orchid and lotus motifs became part of the formal vocabulary of the factory, but her art was also influenced by the Middle and Far East and Persia. At the age of just twenty-one, she designed the trademark of the factory, which featured the initials T, J and M, the first names of the three siblings, under the five towers (a reference to the German name of Pécs - Fünfkirchen, or Five Churches).

An independent architectural department of the Zsolnay factory was established in 1885, which managed the execution of building ceramics orders. At the National General Exhibition of 1885 in the City Park, the full range of the factory's products, including building ceramics, was successfully exhibited. From the early 1890s, Vilmos Zsolnay's artistic development focused on research into eosin glaze. This aurulent and crimson metallic lustre glaze, reducedly fired, containing silver oxide and copper oxide, had already been used in medieval Arab and Renaissance Italian workshops. Competing with English and French researches, Vilmos Zsolnay, with the help of Lajos Petrik (1851-1932) and Vince Wartha (1844-1914), professors of chemistry, worked from 1890 onwards to revive this forgotten technique. It is interesting to note that Wartha was later also involved in the re-establishment of the Herend porcelain factory, and his wife Vilma Hugonnai, was the first woman doctor in Hungary. 

The National Millennium Exhibition of 1896 was a significant milestone in the life of the manufactory. It was then that eosin technology became an undivided success. While the decorative vessels on display at the exhibition featured mainly folk and oriental motifs, in the following years ceramics shaped in the spirit of Art Nouveau became popular.
In March 1900, Miklós Zsolnay took over the management of the factory after the death of his father. Under the leadership of Miklós, who was well educated and multilingual, the factory's industrial production became predominant. During the World War I, architectural ceramic production almost ceased, and was replaced by the manufacture of electrical insulators mainly. The post-war crisis and the loss of raw material sources also hit the factory hard. This was aggravated by the illness of Miklós Zsolnay, and after his death, his heirs took over the factory. The key to survival was the switch to porcelain, and in addition to porcelain insulators, the production of porcelain tableware was also started. Later, the Great Depression and the World War II did not favour the competitiveness of the once prosperous company. During the World War II, production fell sharply and then ceased. After nationalisation, during the first five-year plan, the National “Zsolnay” Porcelain Factory of Pécs, produced mainly industrial porcelain, and the company even survived privatisation. A new city quarter was created on the site of the former factory in the frame of the European Capital of Culture 2010, the Zsolnay Cultural Quarter.

Concerning the buildings decorated with Zsolnay ceramics, there are more than 250 buildings in the territory of the former Austro-Hungarian Monarchy.
From the Parliament building to the Museum of Applied Arts, numerous historic buildings of outstanding importance bear witness to the exceptional achievements of the factory of Pécs.
Speaking of Pécs, although the city is undeniably as inextricably linked to the factory as Szerencs is to the chocolate factory, a plant was also set up in Budapest between 1895 and 1902 to expand its capacity, producing sanitary goods and tiles in the capital. The factory was located in Öv Street in Zugló, which operated as the Budapest Porcelain Factory after nationalisation. The factory site is now the Porcelán housing estate, and only the surrounding street names (Majolika, Fajansz, Zsolnay Vilmos) are a reminder of the once famous factory.

The Zsolnay porcelains and ceramics are Hungarikums, and the name Zsolnay is a symbol of tradition, uniqueness, artistic value and constant renewal. The factory is still in operation today, and perhaps one of the most beautiful examples of this is the Zsolnay fireplace in the St. Stephen's Hall of the Palace of Buda Castle. At the Zsolnay Porcelain Manufactory in Pécs, experts have recreated the fireplace based on the original designs, mock-ups and archive photos.