The hamlet of Mühlpöllnitz was first mentioned in a document in 1786. Right next to the headwaters of the Pöllnitzbach near Oberpöllnitz are the villages of Oberpöllnitz, Mittelpöllnitz and Niederpöllnitz. There are still large mill ponds in Mühlpöllnitz. The mill that gave the village its name was a cutting and grinding mill.
In 1670, a Martin Heselbarth was mentioned in Mühlpöllnitz. In 1681, Georg Arzt worked in the mill. In 1719, the manor and the mill came into the possession of Mrs. von Beust, née Pöllnitz, who then sold it again.
In 1952, a new mill building was built, which was used by the LPG "Neues Leben" from 1954 onwards. This was integrated into the LPG "Neue Zeit" in Geroda in 1968. Operations ceased in 1991. The new buildings have been empty ever since, as no subsequent economic use was found. The old buildings have been privately restored and are used as residential houses. Some of the mill ponds are used for carp farming.