Marie Tussaud was born as Marie Grosholtz in 1761 in Strasbourg, France. Her mother worked as a housekeeper for Dr. Philippe Curtius in Bern, Switzerland, who was a physician skilled in wax modelling. Curtius taught Tussaud the art of wax modelling.

Tussaud created her first wax sculpture, of Voltaire, in 1777. Other famous people she modelled at that time include Jean-Jacques Rousseau and Benjamin Franklin. During the French Revolution she modelled many prominent victims. In her memoirs she claims that she would search through corpses to find the severed heads of executed citizens, from which she would make death masks. Her death masks were held up as revolutionary flags and paraded through the streets of Paris. Following the doctor's death in 1794, she inherited his vast collection of wax models and spent the next 33 years travelling around Europe. When she married Francois Tussaud in 1795, the show acquired a new name: Madame Tussaud's. In 1802 she went to London, having accepted an invitation from Paul Philidor, a magic lantern and phantasmagoria pioneer, to exhibit her work alongside his show at the Lyceum Theatre, London. She did not fare particularly well financially, with Philidor taking half of her profits. As a result of the Napoleonic Wars, she was unable to return to France, so she traveled throughout Great Britain and Ireland exhibiting her collection. From 1831 she took a series of short leases on the upper floor of "Baker Street Bazaar" (on the west side of Baker Street, Dorset Street and King Street), which later featured in the Druce-Portland case sequence of trials of 1898–1907. This became Tussaud's first permanent home in 1836. One of the main attractions of her museum was the Chamber of Horrors.

Madame Tussaud's wax museum has now grown to become a major tourist attraction in London, incorporating (until 2010) the London Planetarium in its west wing. Today's wax figures at Tussauds include historical and royal figures, film stars, sports stars and famous murderers. Known as "Madame Tussauds" museums (no apostrophe), they are owned by a leisure company called Merlin Entertainments, following the acquisition of The Tussauds Group in May 2007.

In July 2008, Madame Tussauds' Berlin branch became embroiled in controversy when a 41-year-old German man brushed past two guards and decapitated a wax figure depicting Adolf Hitler. This was believed to be an act of protest against showing the ruthless dictator alongside sports heroes, movie stars, and other historical figures. However, the statue has since been repaired and the perpetrator has admitted he attacked the statue to win a bet.[14] The original model of Hitler, unveiled in Madame Tussauds London in April 1933 was frequently vandalised and a replacement in 1936 had to be carefully guarded.

In November 2015, Madame Tussauds announced that it would open a museum in New Delhi in 2017.

American singer Nicki Minaj's statue at the Las Vegas museum was provided extra security following an act of vandalism by one of her fans who took some 'inappropriate' photos in June 2015.

In January 2016, the statue of Adolf Hitler was removed from the London museum in response to an open letter sent by a staff writer of The Jewish Journal of Greater Los Angeles, followed by significant support for its removal from social media.

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