Daniel Ash, his friend David J. Haskins, and Haskins's younger brother Kevin Haskins had played together in various bands since childhood, often not lasting more than one gig. One of the longer-lived of these was a band called The Craze, which performed a few times around Northampton.

However, the Craze still split up fairly quickly, and Ash once again tried to convince his old school friend Peter Murphy to join him, simply because Ash thought he had the right look for a band. Murphy, who was working in a printing factory, decided to give it a try, despite never having written any lyrics or music.

During their first rehearsal, he co-wrote the song "In the Flat Field." Ash's old bandmate Kevin Haskins joined as the drummer. Ash made a point of not inviting David J, the driving force in their previous bands, because he wanted a band he could control.

After only a few weeks though, Ash reconsidered and invited Haskins to replace original bassist Chris Barber. Haskins had already agreed to tour American airbases with another band, but decided that joining his friends' group was "the right thing to do." With their lineup complete, the unnamed band played their first gig at the Cromwell pub in Wellingborough on New Year's Eve 1978.

The band chose the name "Bauhaus 1919", a reference to the German Bauhaus art movement of the 1920s, because of its "stylistic implications and associations", according to David J. Bauhaus associate Graham Bentley said that the group was unlike any Northampton band of the time, most of which played predominantly cover songs.

Bentley videotaped a performance by the group, which was sent to several record labels in the hope of obtaining a contract. This approach was hindered partly because many record companies at the time did not have home video equipment or Bentley had to provide it himself, so the group decided to record a demo.

Together for only six weeks, Bauhaus entered the studio for the first time at Beck Studios in Wellingborough to record a demo. The band recorded five songs; one of the tracks from the session, "Bela Lugosi's Dead", running more than nine minutes, was released as the group's debut single in August 1979 on Small Wonder Records as Bauhaus (the 1919 abandoned).

The single received a positive review in Sounds and stayed on the British independent charts for two years. The song received crucial airplay on BBC Radio 1 and DJ John Peel's evening show, and Bauhaus was subsequently asked to record a session for Peel's show, which was broadcast on January 3, 1980.

The band released three more singles, "Dark Entries", "Terror Couple Kill Colonel" and "Telegram Sam" (originally written by glam rock pioneers T.Rex) before the debut of their first album In the Flat Field in 1980 on 4AD. Despite negative reviews, In the Flat Field topped the indie charts and made headway onto the British pop charts, peaking for one week at number 72.

Bauhaus' growing success outstripped 4AD's resources, so the band moved to 4AD's parent label Beggars Banquet Records. Bauhaus released "Kick in the Eye" as its debut release on the label. The single reached number 59 on the charts. the following single "The Passion of Lovers" peaked at number 56.

Bauhaus released its second album Mask in October 1981. The band employed keyboards and other instruments to add to the album's sounds. In an unconventional move, the group shot a video for the album's title track as a promotional tool for the band as a whole and not any specific song from the record.

Bauhaus followed with the single "Spirit", produced by Hugh Jones and intended to break into the Top 30. However, "Spirit" only reached number 42. The band was displeased with the single and re-recorded it for its third album The Sky's Gone Out (1982).

In the same year Bauhaus scored their biggest hit with a cover of David Bowie's "Ziggy Stardust", which was recorded during a BBC session. The song reached number fifteen on the British charts and earned the band an appearance on the television show Top Of The Pops. Thanks to the success of the single, the album also became the band's biggest hit, peaking at number four.

That same year Bauhaus made an appearance in the horror film The Hunger, where they performed "Bela Lugosi's Dead" during the opening credits. The final cut of the scene focused on Murphy; this, coupled with the singer's modelling work in a popular ad campaign for Maxell, caused resentment among the rest of the group.

Prior to the recording of their fourth album Burning from the Inside (1983) Peter Murphy was stricken with pneumonia, which prevented him from contributing much to the album. Daniel Ash and David J took the reins and became the driving forces behind the record, and even did lead vocals on a few tracks.

The album's lead single, "She's in Parties", reached number 26 on the charts and earned Bauhaus their third and final Top of the Pops appearance. Bauhaus then embarked on an international promotional tour for the album, with dates in Europe and the Far East. David J recalled that the night before they were supposed to perform two shows at Hammersmith Palais in London the group decided to disband.

The band played their farewell show on 5 July 1983 at the Hammersmith Palais; dedicated fans had been warned by the band's crew not to miss the show without telling them it was the last. After a long encore consisting of some of their early songs, David J left the stage with the words "rest in peace".

Burning from the Inside was released a week later. The album received largely positive reviews and reached number 13 on the charts. Bauhaus released the single "Sanity Assassin" in limited quantities as a farewell gift for those who joined the group's fanclub.