Jews first settled in Buda in large numbers in the mid-13th century. Hungarian king Béla IV enlisted their financial support for the city’s reconstruction following the decimation of the city by the Tatar/Mongolian army. Life for Jews in medieval Buda alternated between long periods of civic, commercial and religious liberties and vicious pogroms directed at them.
During the Ottoman occupation, both Ashkenazi and Sephardic communities lived in Buda. They each had their own synagogues, located across from one another on what was then called "Jewish Street" (today Táncsics Mihály Street). Following the defeat of the Ottomans by the Holy League in 1686, the allied forces ravaged and looted the Jewish Quarter. Most Jewish residents died or fled the country, and of Buda's three medieval synagogues only one has remained.
In more modern times, Jews have again played an important role in Budapest’s economic and cultural development, particularly starting in the 1800s. They were once again drawn to Hungary by civil equality (gained in 1867), and Budapest’s appeal as a welcoming metropolis teeming with opportunities. By 1910, over 23% of Budapest’s population was Jewish.
Most of the over 200 thousand Budapest Jews belonged to the progressive “Neolog” faction (orthodox Jews mainly lived in the Hungarian countryside). Neologs, while adhering to Jewish religious laws (halakha), believed in the evolution of Judaism and a non-literal interpretation of the Torah. They preferred some level of integration into local society, for instance by switching from speaking Yiddish and German to Hungarian. Orthodox Jews deeply resented the Neolog's assimilation efforts, and following the 1868 Hungarian Jewish Congress, the two factions officially split (there was a third, smaller group called "Status Quo Ante" who wanted to keep things as they had been). It's because of this division that the old Jewish Quarter has three separate synagogues so close to one another.
Neologs were the backbone of Budapest’s middle class society. Besides commerce, where over 60% of Budapest’s merchants were Jewish in 1910, Jews were overrepresented in medicine (59% of doctors) and law (61% of lawyers). Also, many Jewish businessmen founded industrial companies that laid the foundations of modern capitalist corporate culture, unknown in Hungary before.
Jews were punching above their weight in arts and sciences too. Ironically, many became internationally well-known because they left the increasingly anti-Semitic Hungary in the 1930s. These include John von Neumann, Marcel Breuer, László Moholy Nagy, Robert Capa, and Andre Kertész, just to name a few.
There’re several possible explanations why anti-Semitism began to rise in Hungary following WWI. The country lost two thirds of its territories after the war, and became a predominantly ethnic Hungarian country, instead of the multiethnic society it previously had been (in 1910 only 54% of the population was Hungarian with meaningful Romanian, Slovakian, German, and Serbian minorities). This meant that post-WWI, the government no longer had to rely politically on Hungarian Jews to tilt the ethnic scale towards a Hungarian majority.
Furthermore, the inflow of Hungarians who now fell outside the borders of the mother country increased the competition for jobs, and created enmity towards Jews, who were overrepresented in traditionally middle class positions (law, medicine, etc.). The numerus clausus of 1920, which limited the proportion of Jews in higher education, was followed by three more anti-Semitic laws between 1938 and 1941. These restricted Jewish representation in white collar professions and ultimately stripped them of basic human rights: they banned intermarriages, and even sexual intercourse between Jewish men and Christian women.
Events turned truly tragic after March 1944, when the German army occupied Hungary. The local Hungarian gendarmerie willingly executed the orders of the pro-German government and deported 437 thousand Jews from the Hungarian countryside to concentration camps, mostly to Auschwitz.
Jews of Budapest were crowded into “starred houses”, and soon after the Hungarian Nazi party formed government in October 1944, most of them (70 thousand people) were herded into a ghetto set up in the Jewish Quarter of District 7, where thousands died of hunger and epidemics before Soviet troops liberated the ghetto on January 18, 1945. Others sought refuge in "protected houses", most of which were in the Újlipótváros neighborhood. These were established by foreign diplomats, including Carl Lutz and Raoul Wallenberg, and were supposed to keep the Nazis away. But raids and mass executions were regular.
Overall, more than 500 thousand Jews died during the holocaust in Hungary. Thousands of survivors left the country immediately after the war, and later, during the Hungarian Revolution of 1956.
With an estimated population of 80 thousand today (less than 10% are practicing Jews), Budapest is still home to by far the largest Jewish community in Central and Eastern Europe. This is most visible during the major Jewish holidays in the fall (Rosh Hashanah and Yom Kippur) when the enormous and usually deserted Dohány Street Synagogue fills up to capacity. Jews live in all parts of the city, but the former Jewish Quarter in District 7 and Újlipótváros in District 13, the latter for the well-to-do, have the highest Jewish populations. Most members of the orthodox community left Hungary long ago, but the few remaining members live near their central synagogue on Kazinczy Street. During Sukkot, passersby can see the sukkah set up in the courtyard of the building.
Today 16 functional synagogues operate across Budapest (31 in Hungary) with a small, few thousand member congregation in total. But the divisions among Budapest Jews haven't ceased to exist. Most members still belong to the assimilated Neolog faction (with 11 functional synagogues, led by Dohány Street Synagogue), followed by the increasingly active Chabad-Lubavitch Hasidics (2 synagogues), and the Autonomous Orthodox Jewish Community (3 synagogues).
A total of five elementary, or middle and high schools provide Jewish education alongside the Hungarian curricula in Budapest. Budapest is also home to Central Europe's single university of Jewish studies. Since the university has historically belonged to the Neologs, Hungarian orthodox Jews generally attend yeshiva in Vienna or Jerusalem.
Only three glatt kosher restaurants (Hanna, Carmel, Tel Aviv Café), three kosher convenience stores, and just a single kosher pastry shop and bakery operate in the city. Some of this is obviously the result of the devastating impact of the Holocaust. The other reason for the scarcity of kosher food is that the vast majority of Budapest Jews assimilated into local Hungarian society, which led to a Magyarization of their kitchens too. Rosenstein Restaurant serves the best kosher-style food in Budapest. See here for a full list of Hungarian-Jewish restaurants in Budapest.
Today, the streets and dilapidated buildings of the former Jewish Quarter are home to revitalized Hungarian culture: bristling with art galleries, shops, and cafés. This area has become an epicenter of nighttime activity, particularly in and around Gozsdu Udvar, a passage teeming with popular bars and restaurants. Perhaps the most bizarre evidence of this transformation is that the city’s only Jewish ritual bath (mikveh) is located immediately next to Szimpla, the world famous ruin bar.