As a prominent hilltop castle, Burg Lauenstein shapes the landscape above the village of Lauenstein at 550 m above sea level and belongs to the southeastern surroundings of the town of Ludwigsstadt in the northern part of the district of Kronach. Its oldest structural elements can be traced back to the 12th century; the site is first mentioned in a document in 1138.
The complex played a strategic role in medieval border conflicts and changed hands several times. Early connections to regional noble families and resulting local seats are recorded; name mentions from the 13th to the 15th centuries attest to its sustained importance. In the 15th century the castle, as a result of debts, came under the suzerainty of a Brandenburg ruler and was repeatedly the target of disputes. In the 16th century an extensive rebuilding shaped the present main wing in the Renaissance style, with four corner towers set on the diagonal. Until 1622 the castle remained in the possession of a noble family; thereafter the margrave established an administrative office, and from that period date, among other things, the still-visible stone bridge in front of the gate complex and the former administrative building in the outer bailey.
After varied uses and changes of ownership, the castle passed to Prussia at the end of the 18th and the beginning of the 19th century and later to Bavaria. In the 19th century the complex fell into disrepair, until a private acquisition near the end of the century initiated large-scale repairs and its use as a boarding house and hotel. The restoration was carried out in the then-typical historicising style with deliberate reference to medieval models; the house was at the same time used as a cultural meeting place and attracted literary and artistic guests. During the First World War, significant intellectual conferences were held here in 1917, attended by numerous prominent scholars and writers. From 1944, during the Second World War, the castle housed a military office; during this time the head of that office was at times placed under house arrest.
The Free State of Bavaria acquired the complex in 1962 and carried out extensive restoration measures between 1966 and 1976, during which masonry, roof structures and interiors were repaired. In the main castle the Bavarian Administration of State Palaces, Gardens and Lakes established a museum. In more than twenty authentically furnished rooms with tiled stoves, paintings and historicising furnishings, armour and weapons of the 16th and 17th centuries are displayed, as well as craft collections such as locks and keys, lamps, musical instruments and ethnographic objects.
In tradition the castle is also surrounded by legends. Particularly well known is the so-called Mantellegende, which describes a foundation in early medieval times. In the immediate vicinity the fairy-tale trail commemorates the tale of the cook’s grave; today, rock fragments mark a spot that in the legend is regarded as the burial place of a condemned cook and her child.