Caruso sauce was first created in the 1950s in Uruguay, South America, by Raymundo Monti of the restaurant 'Mario and Alberto', located at the intersection of Constituyente and Tacuarembó Streets in Montevideo. Monti wanted to create a new recipe following the current traditions of Italian cuisine. The dish was named in honor of the famous Neapolitan tenor Enrico Caruso (1873–1921) who was a popular figure in South America during his tours of the 1910s.
The sauce was originally thought to be a variant of bechamel but its flavor is distinctly different. Several culinary seminars referred to Caruso sauce as "the new invention" and it gained international culinary recognition. In recent decades, the sauce has become increasingly popular in most South American and Western European countries.
At present, the sauce is considered as part of the Uruguayan cultural heritage and is urged by the Asociación Uruguaya de Gastronomía (Uruguayan Cuisine Association) to be included in the menu of every restaurant or food outlet within the limits of the country. Due to the shared cultural background existing between Uruguay and Argentina, it is not unusual to encounter Caruso sauce on restaurant menus in Buenos Aires. It can even be found in some Brazilian restaurants.