Around the year 1180, the Habsburgs acquired the region around present-day Laufenburg. They constructed fortifications on both sides of the Rhine, including the first Laufenburg. Parts of this castle were likely integrated into the new fortification later. When Count Rudolf II of Habsburg wanted to establish a town near the castle, the abbess of the Säckingen monastery thwarted the plan with an arbitration ruling.
Later, Rudolf's son moved his residence to the southern castle and transformed it into a residential castle, founding the Habsburg-Laufenburg dynasty. During this period, the visible keep, known as the Bergfried, was built. Despite the arbitration ruling, the settlement around the castle obtained town privileges in the 13th century, renewed in 1328.
Facing economic challenges, the Habsburg-Laufenburgs sold the castle and dominion to Duke Leopold III of Austria in 1386 for 12,000 guilders. In 1443, during the Old Zurich War, forces from Basel and Bern attacked Laufenburg, causing significant damage. After passing briefly into the hands of Duke Charles the Bold during the Burgundian Wars, the city was taken over by Kaspar von Schönau in 1486, who repaired the damages from the siege.
During the Thirty Years' War, the Swedes captured the city and the castle three times. Only in 1648 did the Austrians regain control. At that time, the castle had defensive walls with towers almost as high as the Bergfried. There were numerous rooms, a castle garden, and a castle chapel. However, the condition of the castle deteriorated significantly due to the war. In 1687, Italian experts determined that the castle had lost its military value, leading to its neglect. The castle was abandoned in 1787 and used as a quarry. In 1803, the city of Laufenburg purchased the remaining ruins for 2815 Swiss francs. In 1908, a park was established, and in 1986, the preserved parts of the ruin were restored.
