Embalming has been used in many cultures, although the culture that developed embalming to the greatest extent was that of ancient Egypt, who developed the process of mummification.
Embalming in Europe wasn't as far evolved, it was tried especially during the Crusades, when crusading knights and noblemen wanted to have their bodies preserved for burial closer to home. With the Renaissance anatomists needing to preserve their speciment embalming began to come back into practice.
Contemporary embalming methods improved during the American Civil War. Dr. Thomas Holmes received a commission from the Army Medical Corps to embalm the corpses of dead Union officers to return to their families. The passage of Abraham Lincoln's body home for burial was made possible by embalming and it brought the possibilities and potential of embalming to a wider public notice.
In 1867, the German chemist August Wilhelm von Hofmann discovered formaldehyde, whose preserving properties were discovered and which became the foundation for modern methods of embalming.
In the 19th and early 20th centuries arsenic was frequently used, but this was not the best option as were questions about the arsenic from embalmed bodies later contaminating ground water supplies. There were also legal concerns as people suspected of murder by arsenic poisoning could claim that the levels of poison in the deceased's body were a result of embalming post mortem rather than evidence of homicide.