The origin of the name of Bungay is thought to derive from the Anglo-Saxon title Bunincga-haye, signifying the land belonging to the tribe of Bonna, a Saxon chieftain.

Joseph Hooper, a wealthy Harvard University graduate who fled Massachusetts when his lands were seized after the American Revolution, rented a mill at Bungay in 1783 and converted it for paper manufacture.

In 2008, Bungay became Suffolk's first Transition Town and part of a global network of communities that have started projects in the areas of food, transport, energy, education, housing and waste as small-scale local responses to the global challenges of climate change, economic hardship and limited cheap energy.

According to legend,[16] an apparition appeared during the thunderstorm, consisting of a black Hell Hound which dashed around the church, attacking members of the congregation.

It then suddenly disappeared and re-appeared in Holy Trinity Church, Blythburgh 12 miles (19 km) away, injuring members of the congregation there.

The local football club, Bungay Town, play in the Anglian Combination, having previously been members of the Eastern Counties League.

The noted French writer, politician, diplomat and historian, François-René, vicomte de Chateaubriand while exiled from France, 1792 – 1800, during the Revolution spent a period living at the Music House, No.

[19] Others were Catharine Parr Traill, who concentrated on children's literature, and Susanna Moodie, who emigrated to Canada and wrote Roughing it in the Bush (1852) as a warning to others.

The novelist Sir H. Rider Haggard (1856–1925) was born nearby in Bradenham and presented St. Mary's Church with a wooden panel, displayed behind the altar.

Religious writer Margaret Barber (1869–1901), author of the posthumously published best-selling book of meditations, The Roadmender, settled in Bungay.

[20] More recently, Formula 1 motor racing president Bernie Ecclestone was brought up in Bungay and internet activist Julian Assange was confined to nearby Ellingham Hall, Norfolk in 2010–11.

Gilding won the PDC's UK Open tournament in 2023, defeating Michael van Gerwen 11-10 in the final at Butlin's Minehead Resort.