The castle was built from 1368 by Count Eberhard V von Katzenelnbogen to secure the north-eastern border of his area. The handed-down completion date of 1371 is considered improbable because of the construction time, which appears to be clearly too short. The surrounding settlement must have existed before the castle, because Emperor Charles IV also granted it city rights in 1368, which included permission to build fortifications and organize a weekly market on Tuesdays. Nevertheless, the settlement did not develop into a city and was referred to as "spots" until the 18th century.
In 1536 the castle fell to the House of Nassau. After a division of inheritance, Count Wilhelm von Nassau-Weilburg received Burgschwalbach in 1594 as well as the administrative district administered from there. He made the castle his residence. His widow Erika used the castle as a widow's residence until 1628 and had the complex partially repaired. Until 1720 the building housed a Nassau-Weilburg office.
In 1737 repairs would have become necessary again. In view of the high costs, the administration of Nassau-Usingen, to which Burgschwalbach now belonged, decided to let the castle fall into disrepair. Inventory, wooden components and the roof were therefore auctioned off and removed.
In 1817 the master carpenter Georg Philipp Schnabel bought the gatehouse. His family opened a restaurant at the castle in 1858. There is a restaurant there to this day.