Bugatti was born in Milan into a family of artists and craftsmen. His father, Carlo Bugatti, was a noted Art Nouveau furniture and jewellery designer. His younger brother Rembrandt was a renowned animal sculptor, and an aunt was married to the painter Giovanni Segantini. Despite his father's intention that Ettore follow a conventional apprenticeship with one of Milan's tricycle and quadricycle manufacturers, the young Bugatti quickly showed an innate understanding of motor vehicle construction. By 1898, working with the firm Prinetti & Stucchi, he had already built his first car, designated the Type 1.
With financial backing from a Count Gulinelli, Bugatti developed a second prototype — the Type 2 — which won recognition at the Milan Trade Fair in the spring of 1901. The design attracted Baron Adrien de Turckheim, who invited Bugatti to design automobiles at the Lorraine-Dietrich factory in Niederbronn, then located in German-administered Alsace. From 1902 to 1904, De Dietrich produced his Type 3 through Type 7 under the label "De Dietrich, Licence Bugatti." During this period he met Émile Mathis; the two formed a partnership after leaving De Dietrich in 1904, producing cars under the "Mathis-Hermes (Licence Bugatti)" name until 1906.
After parting with Mathis, Bugatti established a research facility at Illkirch-Graffenstaden near Strasbourg and began collaborating with the Cologne-based Deutz company. In 1907, he was appointed Production Director at Deutz, where he designed the Type 8 and Type 9. While employed there, he simultaneously built the Type 10 in the basement of his home — a characteristically driven act of parallel creative ambition. In 1913 he also designed a small car for Peugeot, the Type 19 Bébé.
In 1909, Bugatti founded his own company, Automobiles E. Bugatti, at Molsheim in German Alsace. The factory would become synonymous with precision engineering, speed, and aesthetics. Bugatti cars were celebrated not only for their mechanical sophistication but for their beauty, reflecting the founder's artistic heritage as much as his engineering prowess.
The company achieved rapid motorsport success. Bugatti machinery dominated early Grand Prix competition, and a Bugatti was driven to victory in the inaugural Monaco Grand Prix in 1929. The marque became one of the defining forces of the inter-war racing era, producing cars that combined lightness, agility, and reliability with an artisanal quality that set them apart from more industrially produced rivals.
During World War I, displaced from Molsheim, Bugatti turned his talents to aeroplane engines, designing a distinctive 16-cylinder U-16 unit, though it saw only very limited production and installation. Between the wars he pursued remarkably diverse engineering projects: the Autorail Bugatti, a motorised railcar that achieved considerable commercial success on French railways, and the Model 100 aircraft, designed with Louis de Monge using twin Type 50B Bugatti engines. The aircraft was never flown operationally, as the outbreak of World War II intervened before it could be completed. Bugatti also designed surgical instruments for a friend who was a professor at a nearby hospital; some of these instruments reportedly remained in clinical use long after his death.
The death of his son Jean on 11 August 1939 marked a turning point for Ettore Bugatti and the company. Jean, who had become an accomplished designer in his own right and was deeply involved in the firm, was killed at the age of 30 while testing a Bugatti Type 57 tank-bodied racing car on a closed road near the Molsheim factory. The loss devastated Ettore, and the company's fortunes began to deteriorate.
World War II compounded the damage. The Molsheim factory was ruined during the conflict, and Bugatti lost effective control of the property. His Italian origins brought him under suspicion in the post-liberation atmosphere of France, and his Alsatian property was seized by the state. He planned a new factory at Levallois in Paris and designed a series of new cars during the war years, but circumstances prevented their realisation.
Ettore Bugatti married Barbara Maria Giuseppina Mascherpa in 1907. Together they had four children: daughters L'Ébé (born 1903) and Lidia (born 1907), and sons Jean (born 1909) and Roland (born 1922). After Barbara died in 1944, Bugatti remarried in 1946, to Geneviève Marguerite Delcuze; they had a daughter, Thérèse, and a son, Michel.
Bugatti's personality was as distinctive as his cars. His relationship with customers was notably unsentimental. When an owner complained that his Bugatti was difficult to start on cold mornings, Bugatti reportedly replied: "Sir! If you can afford a Type 35, you can surely afford a heated garage!" When another customer complained about the brakes on a particular model, he answered: "I make my cars to go, not stop!"
Bugatti died at the American Hospital in Neuilly-sur-Seine, in the late summer of 1947, from the after-effects of a stroke. A court had restored his seized Alsatian property to him on 20 June 1947, but he died on 21 August without regaining consciousness, almost certainly unaware of the decision. He was buried in the family plot at the municipal cemetery in Dorlisheim, near Molsheim.
He was inducted into the Automotive Hall of Fame in 2000. The Musée de la Chartreuse in Molsheim maintains a permanent section dedicated to his life and work. The Bugatti name, revived by successive owners in the decades after his death, remains one of the most recognisable and prestigious in the history of the automobile.