The 509th was ordered formed on 9 September 1943, taking most of its personnel from Panzer-Regiment 204 of the disbanded 22nd Panzer Division.

Reaching the Front in October 1943, the 509th saw action near Kirovograd and Krivoi Rog, and participated in Wehrmacht's retreat.

After it had received forty-five new Tiger IIs in December 1944, the detachment was attached to IV SS Panzer Corps, which was preparing an attempt to relieve the encircled garrison of Budapest.

During the operation, the 509th had lost forty of its forty-five Tiger IIs, with ten being total losses.

The 509th was transferred to III Corps, to support Operation Frühlingserwachen in March, and retreating to Vienna.