The Cesky Terrier, also known as the Czech Terrier or Bohemian Terrier, was developed in the mid-20th century by František Horák, a Czech breeder and research assistant at the Czechoslovak Academy of Sciences. Horák aimed to create a versatile hunting dog suitable for the forests of Bohemia, combining the determination of the Scottish Terrier with the adaptability of the Sealyham Terrier. He began his breeding program in 1948, initially working with Scottish Terriers and Sealyhams, seeking a dog with a narrow chest and head, moderately sized body, and drop ears to navigate small burrows, while also possessing a friendly temperament and a manageable coat. His kennel was named "Lovu Zdar," meaning "Successful Hunter".

The first documented litter of the Cesky Terrier was born in 1949, resulting from a mating between a Scottish Terrier named Donka Lovu Zdar and a Sealyham Terrier named Buganier Urquelle.  Horák continued his breeding efforts, and in 1950, he mated the Scottish Terrier Scotch Rose with the same Sealyham, producing a litter that included Balda Lovu Zdar, a brindle male with the desired drop ears who became a foundation sire. The breed's foundation dam, Diana Lovu Zdar, was born from a subsequent mating between Balda and his sister Baba Lovu Zdar, though this pairing did not produce viable breeding stock. Horák then bred Balda to his mother, Scotch Rose, resulting in two puppies with the correct ear type: Dareba Lovu Zdar and Diana Lovu Zdar, the latter becoming the foundation dam.

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Horák meticulously documented his breeding program, using principles of genetics learned during his time at the Academy of Sciences, making the Cesky Terrier one of the most thoroughly documented dog breeds. He also introduced a unique grooming style, opting for clipping over hand-stripping to maintain a practical coat for hunters, and left the tail undocked. The breed was first presented to the public in 1956 and officially recognized by the Czechoslovakian Kennel Club in 1959. It gained international recognition when the Fédération Cynologique Internationale (FCI) registered the breed in 1963.

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The breed's popularity grew, and in the 1980s, enthusiasts began importing Cesky Terriers to the United States, leading to the formation of the Cesky Terrier Club of America and later the American Cesky Terrier Fanciers Association (ACTFA) in 1988. The breed was officially recognized by the American Kennel Club (AKC) in 2011, entering the Terrier Group. Despite its relatively recent origin, the Cesky Terrier is now recognized by major kennel clubs worldwide and is considered one of the rarest dog breeds, with fewer than 600 in the United States. Horák, who died in 1996, saw his vision realized, and the breed remains a national treasure in the Czech Republic, featured in art, literature, and on postage stamps.