The origin of Bultaco lies in a disagreement at Montesa, where Bultó served as a director alongside Pere Permanyer. Following a factory move and an economic downturn in Spain in 1957, Permanyer sought to withdraw from racing as a cost measure. Bultó, who led the racing programme and embodied much of the company's technical expertise, refused. The two could not reconcile, and Bultó departed. Most of Montesa's racing department followed shortly afterward.
A group of former Montesa staff persuaded Bultó to form a new company, setting up at an old farm he owned under extremely modest conditions. On 24 March 1959, Bultaco held its first press day and launched the Bultaco Tralla 101, a 125 cc road-going machine. Just two months later, Bultaco entered the Spanish Grand Prix and took seven of the first ten places. The company name blended the first four letters of Bultó's surname with the last three letters of his nickname "Paco", a suggestion attributed to racer John Grace from Gibraltar.
While Bultaco produced road and road-racing machines, its lasting impact came through competition-oriented off-road models. The Pursang served motocross, the Matador enduro, the Astro short flat-track racing in the United States, and the Sherpa T observed trials. Of these, the Sherpa T transformed trials competition most profoundly.
Before the Sherpa T, trials were almost exclusively a British discipline contested on heavy, large-displacement four-stroke machines. Irish trials ace Sammy Miller collaborated with Bultó to develop a lightweight two-stroke alternative, which rendered the established four-stroke machines obsolete almost overnight. Miller won the Scottish Six Days Trial in 1965 and repeated in 1967 and 1968. He also claimed the European trials championship in 1968 and 1970. The success of the Sherpa T coincided with a broad growth in trials' popularity across Europe and later the United States, providing Bultaco with a substantial and sustained export market.
Bultaco dominated the World Trials Championship during the 1970s, winning the title eight times, and captured the Scottish Six Days Trial four times across the decade. The Pursang motocross model, available in 125, 250, 360, and 370 cc variants, earned a strong reputation in the United States for handling and competitive performance without requiring modification. The Bultaco Astro became a popular short-track racer in the American market and was used by numerous AMA Grand National riders.
Bultaco motorcycles used single-cylinder, air-cooled two-stroke engines with oil and fuel mixed manually. A notable engineering convenience was that the engine and transmission were universally interchangeable across models and displacements, allowing cylinder swaps between 175 cc, 200 cc, 250 cc, 350 cc, and 360 cc units without aftermarket parts.
Industrial unrest and market pressures forced Bultaco to close production in 1979. The factory reopened in 1980 but shut again in 1983. In 1998 the rights to the Bultaco name were purchased by Marc Tessier, who used them briefly for a range of trials motorcycles under his company Sherco Moto. Those machines were sold initially as Bultaco Shercos, then Sherco by Bultaco, and by 2001 the Bultaco name was dropped entirely. Sherco motorcycle company derives its name in part from the Sherpa model that made Bultaco famous.
A new series of electric Bultacos was announced in mid-2014 and reached sales in 2015. Production of this revival took place in Barcelona, on the site of the original 1958 factory.
The name carries considerable family lineage. MotoGP star Sete Gibernau is a grandson of founder Paco Bultó.