Located around three miles away from Mauthausen concentration camp, the Gusen site had attracted the SS because of its proximity to the Gusen and Kastenhof stone quarries. SS authorities purchased land at the site on May 25, 1938. Managers of the SS-owned firm Deutsche Erd- und Steinwerke (DESt-German Earth and Stone Works), which used concentration camp prisoner labor to extract and finish construction materials at Mauthausen, established next to the “Wiener Graben” stone quarry in 1938, deployed a forced labor detachment from Mauthausen on a daily basis to the Gusen quarries beginning in 1938.

Tiring of marching the prisoner detachment three miles to the Gusen quarries, SS authorities authorized the construction of concentration camp Gusen in late 1939. During the winter of 1939–1940, German, Austrian, and Polish concentration camp prisoners from Mauthausen constructed the camp and prisoner barracks.

Although the site counted as an external labor detachment of Mauthausen during its initial construction, the SS opened Gusen as a separate camp on May 25, 1940, identifying the surviving 212 prisoners from the construction detachment by separate Gusen incarceration numbers and removing their names from Mauthausen records. That same day, a transport of approximately 1,084 Polish prisoners arrived in Gusen.

Over the next several weeks, the SS transferred some 8,000 Polish prisoners to Gusen from other concentration camps, including Dachau and Sachsenhausen. Gusen retained its autonomous status until early 1944. It had its own numbering system, death registry, SS guard battalion, and postal administration.

During the period of its construction, SS Sergeant Anton Streitwieser commanded the Gusen external detachment site. On July 1, 1940, SS Captain Karl Chmielewski became the camp commandant. In late 1942, SS First Lieutenant Fritz Seidler replaced him. Seidler commanded the camp until liberation.

Prisoners

In addition to German, Austrian, and Polish prisoners, the SS incarcerated in Gusen approximately 4,000 Spanish Republicans (Spanish refugees, who had found refuge from the Franco regime in France in 1939 and whom Vichy French authorities turned over to the Germans in 1940) in 1940 and 4,400 Soviet prisoners of war in 1941. Nearly three-quarters of the Spanish Republicans died in the first year at Gusen. By the beginning of 1943, fewer than 500 Soviet prisoners of war were still alive in the camp.

During the later war years, the arrival of more than 3,000 Yugoslavs, more than 9,000 Soviet civilians and more than 2,400 Frenchmen further diversified Gusen's inmate population. Yet the high mortality rate, caused in particular by Commandant Chmielewski's brutal and sadistic management of the camp, kept the prisoner population to between 6,000 and 7,000 up until 1943. Better rations and less arbitrary mistreatment led to a decrease in the death rate from the summer of 1943 until the autumn of 1944, as the SS sought to maintain its labor force.

The need for labor to construct underground tunnels in 1944, induced the SS to increase the prisoner population to more than 24,000 by the end of 1944, including the arrival of 2,750 Hungarian Jews from Auschwitz in June 1944, thousands of Polish Jews from Plaszow, Auschwitz, and Flossenbürg in the late summer and autumn of 1944, 1,000 Polish civilians captured in October 1944 during the Warsaw Home Army uprising, and some 1,500 Italian civilians.