The tavern was founded in 1895, with a sign outside saying “Vinos”. In 1893, Julián Diáz García came to Madrid from a village in Cuenca, looking for work, like many others coming to the capital at that time. He started out as an errand boy for a small liquor business. Two years later, he set up his own tavern in a quiet spot in calle Ruda, which he called Vinos.
It was not until the 50s that fried fish was introduced, followed by the kitchen specialising in cocido madrileño (typical Madrid stew). At this point the owners settled on a name for the business. It was named Malacatín in honour of the busker who played his guitar there in the early days, singing "ma-la-ca-tín".
Nowadays Malacatín is a place of pilgrimage for devotees of Madrid cuisine, cocido (stew) and tapas.