The name Dundas comes from the Gaelic dùn deas, meaning "south hill" or "pretty hill." The lands first appear in the 11th century, granted by King Malcolm Canmore to his paternal first cousin Gospatrick, who had fled south to escape William the Conqueror. They passed through Gospatrick's great-grandson Waldeve, who granted them to a kinsman named Helias in a charter dating from around 1180. Helias took his surname from the land, becoming the first Dundas. James Dundas's 1416 keep was extended in 1436 into an L-plan tower house. Regent Arran, governing Scotland during the infancy of Mary, Queen of Scots, gave a tip to workmen building the "Place of Dundas" in July 1544. On 13 August 1553, in the great hall, another James Dundas presented his infant daughters Elizabeth and Jane with silver plate.

Oliver Cromwell stayed at Dundas Castle around the time of the Battle of Dunbar in September 1650, during his Scottish campaign. A statue of him still stands outside the keep, an unusual choice given Scottish memories of his occupation. In 1818, the family commissioned the architect William Burn to demolish the 17th-century domestic wing and replace it with a fashionable Tudor-Gothic mansion. Burn was the most prolific country-house architect in Scotland of his generation, and his new house wrapped itself around the older keep, leaving the medieval tower standing as a kind of ornament beside its more comfortable successor. The arrangement worked for another eighty years. In 1899, after almost seven centuries of unbroken family ownership, the Dundases sold the castle, along with five farms and 1500 acres, to Stewart Clark, a Renfrewshire textile manufacturer and philanthropist.

Clark's son John took the double-barrelled name Stewart-Clark in his father's honour and was made a baronet in 1918. During the Second World War, Dundas Castle's strategic position above the Firth of Forth gave it a new purpose. It became the headquarters for protecting the Forth Bridge, the great red railway bridge two miles to the east at South Queensferry, which carried the main east coast rail line over the firth and was a prime target for the Luftwaffe. The castle's staff coordinated the air defences and barrage balloons that kept the bridge open through the war. Since 1995 the castle has been owned by Sir Jack Stewart-Clark, great-grandson of Stewart Clark, who served as a Member of the European Parliament from 1979 to 1999.

When Sir Jack inherited the property in 1995, it had deteriorated badly. The 15th-century keep had been uninhabited for over three hundred years. Dry rot had spread through the Burn mansion. He considered selling and then chose, instead, the long road of restoration. The keep's parapet was rebuilt, its stonework restored, and it was fitted with electricity, heating, plumbing, and a kitchen for the first time in its life. The drawing room, library, and dining room of the mansion were brought back to use. The castle now operates as a five-star exclusive-use venue, hosting weddings beside the Boathouse cottage on Dundas Loch, where the same water that mirrored 15th-century Dundases now mirrors a steady stream of newer couples. The 2000 film The Little Vampire was shot here, as were Summer Solstice and Book of Blood; The Weeknd's 2024 video for Popular features the castle at the fifteen-second mark.