On the night of June 1, Gyanendra's brother, King Birendra, his wife and eight other members of the royal family were shot dead in a drunken killing spree by the heir to the throne, Crown Prince Dipendra, who then committed suicide.
The rampage in the royal palace in Kathmandu was reportedly caused by a disagreement between Dipendara and his family over their refusal to allow him to marry the woman he loved.
The official report of events in the palace that night supports that explanation. But alleged inconsistencies in its findings have led some observers to doubt it, and conspiracy theories are widespread.
Some have pointed out that Gyanendra himself reviewed the report's contents before it was made public, others have questioned Dipendra's ability to carry out a massacre using four firearms while intoxicated.
One rumour prevalent after the incident, blamed King Gyanendra's son, Crown Prince Paras, for the deaths. Paras, known to be a heavy drinker, was in the room at the time of the massacre but escaped with light injuries.
King Gyanendra was born in 1947 and was briefly declared king for two months in 1950-51 at the age of three, whilst the rest of the royal family was exiled in India.
According to the Nepali royal family's website, Gyanendra was a businessman with a special interest in environmental and conservation issues before becoming King. He has owned a hotel in Kathmandu and a cigarette factory.
Pro-democracy activists have
taken to the streets in Nepal
After his assumption of the throne, King Gyanendra has remained a contentious and divisive figure in Nepal.
After the quieter constitutional rule of his brother, the king kept his promise to put the Nepali monarchy back at the heart of national politics, famously saying in 2004 that "the days of the monarchy being seen and not heard ... are over".
Gyanendra has justified his interventionist rule on the grounds that Nepal's politicians have failed to halt a conflict with Maoist rebels that has claimed 13,000 lives.
The Nepali king has dismissed the government twice in three years, for the first time in 2002, when he sacked elected Sher Bahadur Deuba, the prime minister, and appointed royalist Surya Bahadur Thapa in his place, postponing planned elections indefinitely.
Thapa resigned in June 2004 after huge protests against the government, and Deuba was re-appointed by the king only to be sacked once again in February 2005.
Since then, the king has taken over direct control of the government, leading to widespread protests from pro-democracy activists opposed to his rule.
He has been criticised by foreign governments and human-rights organisations for his autocratic rule, which has seen opposition leaders imprisoned, demonstrators killed during clashes with police and newspapers censored.
But Gyanendra insists he is still committed to democracy and has promised to hold elections by April 2007.