He was born in Reykjavik, Iceland and moved to the United States at the age of 5. Gunnar lived in Maine till he was 11, his family then moving to Texas, where he went to high school before attending the University of Texas. At the university, he did some theater work and majored in English and mathematics before going on to graduate in English and Scandinavian Studies. Despite graduating in the aforementioned fields, his first job out of high school was as a computer operator.

In the summer of 1973, he heard that Tobe Hooper and others were in town to work on a movie and decided to try out for a part. After interviewing with Tobe Hooper and the writer of The Texas Chain Saw Massacre (1974), Kim Henkel, he was cast in the role of the disturbed, mentally handicapped killer, Leatherface.

After Chainsaw, Hansen went on to work as a freelance writer for magazines for several years before going on to write books, one later being set in Iceland about purported serial killer, Henry Lee Lucas. He has gone on to write multiple screenplays - one co-written with his partner Gary Jones, director of Mosquito (1994)).

Gunnar also directed a documentary on Greenland and had a stint designing web pages for GTE.