Warning: Wikipedia contains spoilers
He was a Neimoidian from the planet Neimoidia, an amphibian-faced humanoid with snake-like eyes. Neimoidians are cunning political manipulators, but they are also untrustworthy and cowardly.
Gunray became the Viceroy of the Trade Federation after the original Trade Federation leaders perished under mysterious circumstances, Gunray being the only survivor. Under the guidance of the enigmatic Darth Sidious, Gunray filled the remaining positions with his associates, making the Trade Federation a Neimoidian monopoly.
Under Sidious' command, Gunray blockaded the peaceful planet Naboo from trade routes. He urged the young queen, Padme Amidala, to sign a treaty granting the Trade Federation control over the planet. The Queen refused, and when Gunray took the planet by force with his battle droids, she escaped with the aid of two Jedi.
After unsuccessfully pleading for intervention by the Old Republic Senate, Amidala called for the expulsion of Supreme Chancellor Valorum, who was unable to outtalk the Trade Federation's Neimodian representative. Naboo's own Senator Palpatine was elected the new Supreme Chancellor.
Despite this, the Senate still would not take action, and Amidala returned home, vowing to liberate her planet or die trying. Gunray was smug in his seeming invincibility, but his reign fell apart rather quickly. The young Queen and her army ambushed and captured him in the palace, and the droid army was disabled when a boy named Anakin Skywalker destroyed the central control ship. Gunray was arrested for his actions, but only Darth Sidious knew the true motives behind the invasion.
After four trials in the Republic Supreme Court, Gunray still maintained control over the Trade Federation, although several of his associates were killed in the Battle of Naboo. Sidious then instructed Gunray to join the Confederacy of Independent Systems, who wished to secede from the Republic. Soon the Trade Fed's resources were focused on creating a droid army for the CID to strong-arm smaller systems to join them.
When Amidala and two Jedi were captured on the CID's base on Geonosis, Gunray saw his chance for revenge, and delighted when the former Queen was sentenced to death. To his fury, she escaped once again, and Gunray was barely able to flee for his own life in the melee between battle droids, Jedi knights, and clone troopers. The Clone Wars had begun, and Gunray suddenly found himself preparing his droids for war. Gunray was a businessman, not a warmaster, but there was no way he could break his ties with the CID without losing his life. Gunray's ultimate fate has yet to be revealed.
Nute Gunray appears in the movies The Phantom Menace and Attack of the Clones. Nute Gunray was played by Silas Carson.
Nute Gunray's presence has prompted various theories into the political leanings of George Lucas. Some are harmless (Gunray's name is amalgam of Newt Gingrich and Ronald Reagan), while some are more severe (Gunray's mushmouthed accent has been interpreted as stereotypically Chinese by some).