The ruins of the castle stand on craggy hill spur at a height of 515 m above sea level (NN), the so-called Bergschmidtsknock, above the eponymous village in the Franconian Switzerland-Veldenstein Forest Nature Park, about 2.2 kilometres north of the church at Obertrubach.

The first record of the castle is dated 2 August 1389, when its occupants, Conrad Hans and Ulrich of Egloffstein zu Bärenfels had to concede their outer bailey, the so-called Lower Fortress (niedere Veste), as a fief following a feud with the Landgraves of Leuchtenberg.

The castle had, however, been built much earlier, probably in 1330 by Siboto I of Egloffstein, progenitor of the Bärenfels line of this family.

In 1483 the fief went to the Gaillenreuth line of the Egloffsteins, who did not hold it for long however, because in 1495 the last enfeoffment was granted by the Leuchtenberg landgrave.

In 1580 the Barony of Bärnfels together with its castle ruins was sold to the Bishopric of Bamberg and was seized by the Bavarian state in 1802 as part of the secularisation in Bavaria.