The park was founded by Michael and Claudia Bonfante after selling their Nob Hill Foods supermarket chain to Raley's in order to focus on building their tree park. The park was constructed gradually over a period of 25 years. Before it became an amusement park open to the public, it was known as Tree Haven, and was a commercial plant nursery, as well as a recreational facility for employees of Nob Hill Foods. The park opened to the public in June 2001 as Bonfante Gardens. The name was changed to Gilroy Gardens in February 2007. The park features 19 rides, 27 attractions and six gardens. The most well known garden features 24 Circus Trees that were grown and shaped with multiple trunks, basket-weave patterns, and hearts by the late Axel Erlandson.

Starting in 2004, the park began its annual holiday celebration, Gilroy Gardens Holiday Lights.

The park struggled with financial difficulty and low attendance during the first two years of operation. It closed early for its first two seasons and the park's management debated whether to open the park at all for the third season. Paramount Parks began to manage the park on contract starting with the 2003 season.

Cedar Fair (now Six Flags) acquired Paramount Parks from CBS Corporation in June 2006 and continued the management contract to operate Gilroy Gardens. On December 31, 2021, the contract to manage the park expired after both parties decided not to renew the contract. Gilroy Gardens Inc., the nonprofit that owns the park, began operating the park on its own for the 2022 season.

The city of Gilroy purchased the park on March 5, 2008.

In mid-March 2020 the park shut down due to the COVID-19 pandemic. It reopened in May 2021, and since then it has been restricted to California residents and adhering to strict measures like social distancing and wearing masks.

On July 25-27, 2025, the site will host the annual Gilroy Garlic Festival.