Glendullan Distillery was established in 1897 by William Williams & Sons, Aberdeen-based whisky blenders, in a wooded valley along the River Fiddich. The distillery used a massive water wheel to power all its machinery. Harper's Magazine wrote: "This saves a considerable amount of money compared to distilleries that must use steam engines." The distillery also shared a private railway siding with its neighbor Mortlach Distillery. All supplies were transported via this branch line until its closure in 1968. The distillery was built exceptionally well, with most of its original equipment still in use in the 1930s. It was the seventh distillery built in Dufftown. This gave rise to the saying: "Rome was built on seven hills, Dufftown was built on seven stills." In 1919, William Williams & Sons merged with Greenlees Brothers, the Glasgow and London-based producers of Old Parr blended whisky. The company later merged with Leith's Alexander & Macdonald Ltd to become Macdonald, Greenlees & Williams. In 1925, the company joined D.C.L., and Glendullan was transferred to S.M.D. in 1930. Between 1940 and 1947, the distillery was closed, and in 1962 it was rebuilt, with the stills converted to indirect heating. Ten years later, a larger new distillery (with 6 stills) was built nearby in the S.M.D. "Waterloo Street" style (see "Caol Ila" etc.). Between 1972 and 1985, both distilleries operated in parallel, with their output being vatted together. The old distillery was later closed and demolished. The buildings are now used as workshops by Diageo.

In 1902, a small quantity of Glendullan single malt was exclusively supplied to the royal household of King Edward VII. The original distillery's whisky character was completely different from—and more highly regarded than—its 1970s productions. Its modern profile is closer to Cardhu, which led to its use in the infamous Cardhu Pure Malt controversy. Since 2007, The Singleton of Glendullan has enjoyed great popularity in the North American market.