The cemetery was created at the scene of fighting that took place in May 1915. It was the Battle of Gorlice won by allied Austro-Hungarian and German forces that broke though the Russian defences and forced the Russian army to retreat to the east. Russian trenches were located in the Pustki and the artillery shelling entirely demolished the first line of trenches. Those hidden in the forest at the top of the hill withstood the barrage and allowed the Russian army to put up resistance. Austro-Hungarian and German forces conquered the hill but at the cost of significant losses. After the war, the Pustki Hill was considered a good place for a necropolis. The necessary work was done by war prisoners. The cemetery was designed by Jan Szczepkowski, the artistic director of circuit IV. In December 2016, the EU Commission of Independent Experts recommended that military cemetery No. 123 Łużna-Pustki be designated with the European Heritage label. The official ceremony of granting the European Heritage Label took place in Brussels in April 2016. The military cemetery in Pustki is the fourth place in Poland awarded that label.