Budapest 1900: A Historical Portrait of a City and Its Culture by John Lukacs (isbn: 0802132502) — A vivid account of fin-de-siècle Budapest at its imperial peak, when the city was one of Europe's most dynamic capitals. Essential background for any visitor.
Under the Frog by Tibor Fischer — A darkly comic novel set in communist Hungary, following a basketball team through the late 1940s to the 1956 uprising. Fischer is Hungarian-British and writes with real insider bitterness and wit.
Fatelessness by Imre Kertész (isbn: 9780810129177) — Hungary's only Nobel laureate in literature tells the story of a teenage Jewish boy deported from Budapest to the Nazi camps. Spare, strange, and unforgettable. Essential reading for understanding the Hungarian Jewish experience.
The Paul Street Boys by Ferenc Molnár — A classic Hungarian novel about rival street gangs in turn-of-the-century Budapest. Beloved across Central Europe.
I Have Lived a Thousand Years by Livia Bitton-Jackson (isbn: 0689823959) — A memoir of survival in the Holocaust, written for younger readers but powerful for all ages.
Ballad of the Whiskey Robber by Julian Rubinstein — A nonfiction account of Attila Ambrus, the Romanian-Hungarian refugee who became the most wanted bank robber in post-communist Hungary while playing amateur ice hockey on the side. Genuinely incredible.
Rough Guide to Hungary or Lonely Planet Hungary — Either is a solid practical companion. The Rough Guide tends to be stronger on history and context; Lonely Planet better on logistics.