In 1933 Mads Clausen (1905–1966) founded Dansk Køleautomatik- og Apparatfabrik, later in 1946 the company name was changed to Danfoss. The first product was an expansion valve for refrigeration units, it was developed after studying imported valves from the US.
In 1941, activities expanded to products for heating.The thermostatic radiator valve was invented by Mads Clausen in 1943, later patented, and in 1952 promoted as an energy saving device.
In 1945 about 224 people were employed at the first factory built at and around the farm where he grew up. There was no more room for expansion and a new larger factory was planned.
Expansion into other countries started in 1956, when the company started to build a factory in Flensburg, Germany, which was completed in 1958.
Danfoss Compressors GmbH, Danfoss' former domestic compressor division, was sold in 2010 and renamed Secop.
China is also an important market for Danfoss. In 2013, two new factories were opened on the same day, bringing the number to seven. The Chinese market was the third largest for the company.
In 2014, Danfoss purchased Vacon, a VFD drive manufacturer.