In the musical, it was revealed that he married Princess Pea of Duloc, who left her throne to marry him. They eventually had a son which they named Farquaad. Sometime during Farquaad's early childhood, Pea died when she fell from the top mattress of their bed, leaving Grumpy to raise Farquaad.
Farquaad claimed that his father had abandoned him in the woods as a child. However, when the fairytale characters brought Grumpy to Farquaad's wedding, he reveals that he kicked Farquaad out because he was twenty-eight years old and living in his basement.
He was one of the dwarfs forging Fiona's wedding ring.
In Shrek, when the scene cuts to the dwarfs, there is a dwarf that looks angry. It is possible that this dwarf is Grumpy.