In 2002, Bob Wyatt (a life-long folk music enthusiast and musician) was running the Cross Keys pub at the top of the Kinecroft. Bob was considering a marquee for the car park behind the Cross Keys for various private events over the summer and approached Colin Dolton (a friend and fellow folk-music enthusiast since their schooldays) about the idea of using the marquee not just for private events but also to host a small folk music festival at the Cross Keys.

Bob and Colin decided the festival idea worth pursuing and approached the folk musicians who frequented the Cross Keys to gather ideas (and potential participants, many of whom have become stalwarts of the festival). Bob and Colin also approached The Cholsey and Wallingford Railway Preservation Society with a view to inviting their participation to raise much-needed funds for the society.

Dave Newson (musician from the Cross Keys folk session and music events specialist) and Jo Simmonds (Jo Clyde – chairman of C&WR and also a folk enthusiast) got together with Bob and Colin for a kick-off meeting – and BunkFest was born.

The name BunkFest derives from a local nickname for the Cholsey and Wallingford branch line of Great Western Railway. When Brunel was planning his route for the GWR, the people of Wallingford decided they did not want a main-line railway running through the middle of their town and so the railway was directed to the south and west of Wallingford and skirts the edge of neighbouring village, Cholsey. A single-track branch line was later built between Cholsey and Wallingford to serve both passenger and goods traffic. The legend goes that, on one occasion, the engine left the station without the carriages (which had been uncoupled as a prank). As the engine had done a bunk, the line was nicknamed the Wallingford Bunk.

Dave and Jo laid grand plans for the inaugural festival and it over-spilled from the Cross Keys pub onto the northern half of the Kinecroft.

The original tagline was Music, Dance, Steam and Beer, a homage to the four principle ideas for the festival. Steam referred to the C&WR, to the small group of live steam traction-engine enthusiasts who would gather at the top of the Kinecroft, and to the musical boat trips on the Thames provided by Salter's Steamers.

Over the years, the BunkFest has grown and moved out of the Cross Keys and now encompasses the whole of the Kinecroft, the town centre, the sports park and many venues around the town. The festival has evolved to become less folk-music orientated and more of a community event showcasing broad-appeal musical talent from around the world.