Gábor István Szabó was born in Budapest on March 8, 1936. He took up the guitar at fourteen, inspired by a Roy Rogers cowboy film, and played dinner clubs and informal jam sessions in the city while still a teenager. Jazz reached him mostly through the Voice of America, which he listened to quietly at night because Western music was officially disapproved of. After the Soviet army put down the Hungarian uprising in 1956 he left the country at twenty, passed through an Austrian refugee camp and ended up in San Bernardino, California. A first trio with two fellow refugees failed, and he worked a year as a janitor to save for music school. He studied at the Berklee School of Music in Boston from 1958 to 1960 and played the 1958 Newport Jazz Festival with the International Youth Band.

In 1961 he joined the quintet of drummer Chico Hamilton, a chamber-jazz group that also featured the saxophonist and flutist Charles Lloyd. He is on Hamilton's Drumfusion (Columbia, 1962) and on later Hamilton albums through The Further Adventures of El Chico (Impulse!, 1966). Away from Hamilton he recorded Lloyd's Columbia album Of Course, Of Course in 1964 and 1965 in a quartet with bassist Ron Carter and drummer Tony Williams, and from 1965 he worked with the arranger and vibraphonist Gary McFarland, appearing on McFarland's The In Sound (Verve, 1965) and Profiles (Impulse!, 1966). His own first Impulse! album, Gypsy '66 (A-9105, February 1966), was billed to him with McFarland and company.

Spellbinder, recorded on May 6, 1966 and produced by Bob Thiele, paired him with Carter, Hamilton and the percussionists Willie Bobo and Victor Pantoja, and he painted its cover himself. It reached No. 140 on the Billboard 200 in January 1967 and holds "Gypsy Queen," an original that Santana folded into a medley with "Black Magic Woman" on Abraxas (1970), a single that peaked at No. 4 on the Hot 100 in January 1971. Jazz Raga, recorded at Rudy Van Gelder's studio on August 4 and 17, 1966 and released in 1967, leaned openly into Indian material, with Szabó credited on guitar and sitar and Bernard Purdie on drums; reviews were mixed at the time and the record later gathered a cult following. In 1967 he led what the critic Scott Yanow called his finest working group, with the guitarist Jimmy Stewart, bassist Louis Kabok, drummer Marty Morell and percussionist Hal Gordon. Their sets at the Jazz Workshop in Boston on April 14 and 15 became The Sorcerer, and a Monterey Jazz Festival set on September 17 supplied half of More Sorcery. That September he also recorded Wind, Sky and Diamonds in Los Angeles with the vocal group the California Dreamers and a studio band that included Herb Ellis and Howard Roberts, working through "A Day in the Life," "Lucy in the Sky with Diamonds" and "White Rabbit," with Bill Plummer on sitar. It is the plainest statement of how far he had stepped into the pop and psychedelic idiom of the moment.

In early 1968 he became a partner in Skye Records with McFarland, the vibraphonist Cal Tjader and the executive Norman Schwartz. For Skye he made Bacchanal (February 9, 1968), Dreams (August 1968, with McFarland arranging, strings, French horns and two pieces by Manuel de Falla) and 1969 (January 1969), a set of Beatles, Joni Mitchell and Buffy Sainte-Marie songs that reached No. 143 on the Billboard 200. He also co-produced Lena & Gabor with Lena Horne, recorded in New York in October and November 1969 with McFarland arranging and the guitarists Cornell Dupree and Eric Gale alongside him; its single "Watch What Happens" became a Top 40 hit in 1970. Skye declared bankruptcy later that year after 21 studio albums.

The 1970s moved him between labels and between jazz and pop. For Blue Thumb he made Magical Connection (1970), a date for a new sextet that took in songs by the Carpenters, Buffalo Springfield and John Sebastian, and High Contrast (1971), produced by Tommy LiPuma with Bobby Womack, which holds the original recording of "Breezin'" that George Benson turned into a hit in 1976 under the same producer. He recorded Small World in Stockholm in August 1972, then signed with Creed Taylor's CTI for Mizrab, made in December 1972 with Carter, Billy Cobham, Jack DeJohnette, Hubert Laws and Bob James arranging and conducting, and Rambler (1973). In the winter of 1973 he was the featured soloist on Paul Desmond's CTI album Skylark. Macho (Salvation, April 1975), produced by James, put him with Gale, Tom Scott, Harvey Mason, Ralph MacDonald and Idris Muhammad and included a version of Liszt's Hungarian Rhapsody No. 2. His two Mercury albums, Nightflight (1976, produced by Bunny Sigler) and Faces (1977, produced by the Crusaders' Wayne Henderson), were the most openly commercial records of his career, and AllMusic calls Faces his last American album. Belsta River, recorded in Stockholm in January 1978, and Femme Fatale, recorded in California in 1979 with Chick Corea as featured guest and issued in 1981 on Hungary's Pepita label, closed the catalog.

He began returning to Hungary to perform in 1974 and went back several times over the following years. A long-running heroin addiction, dating to his years with Hamilton, wore down his health and his career. In the late 1970s he sought treatment through a program run by the Church of Scientology and signed with a management firm connected to it; he later sued the church and the firm, and the case was settled the following year. While visiting family in Budapest over the Christmas holiday he was admitted to hospital with liver and kidney failure, and he passed away on February 26, 1982, a few days short of his 46th birthday. He is buried next to his mother in Budapest's Farkasréti Cemetery. Live recordings from his Hungarian appearances have since been issued.

AllMusic describes Szabó as one of the most original guitarists of the 1960s, a largely self-taught player whose sound mixed his Hungarian folk heritage with a love of jazz. His jazz credentials are solid: Berklee, Newport in 1958, four years in Hamilton's quintet, the Lloyd quartet with Carter and Williams, a long Impulse! and CTI catalog and a featured-soloist role on Paul Desmond's Skylark. It is equally plain that much of his output was aimed at a pop audience. From Wind, Sky and Diamonds on he recorded the Beatles, Joni Mitchell, the Carpenters and Buffalo Springfield; Jazz Raga put sitar and raga forms in the middle of a jazz date at the height of the sixties psychedelic scene; and by Nightflight and Faces he was working inside Philadelphia soul and disco-era R&B production, a stretch AllMusic's reviewer of Faces calls dated. His best-known composition, "Gypsy Queen," reached a mass audience through Santana rather than through his own record. AllMusic's reviews rate Spellbinder and The Sorcerer highest, and describe the Skye and CTI albums as worthwhile but uneven. Later artists have acknowledged him: the Danish psychedelic band Causa Sui made an album called Szabodelico in his honor, and Robby Krieger of the Doors is reported to have been influenced by his playing.