Archaeological excavations have revealed some ornaments made from Spondylus shells fairly rare in this Northern region.

Derenburg was probably founded under the rule of King Henry the Fowler (d. 936 AD), who had a fortified Königspfalz erected; the first likely mention of the settlement is in a 937 deed issued by his son and successor Otto I.

Derenburg Castle remained a preferred location of the Ottonian dynasty until in 1008 King Henry II ceded the estates to Gandersheim Abbey under his aunt Abbess Sophia.

Subsequently, the comital House of Regenstein was enfeoffed with the lordship and the Pfalz of Derenburg lost its Imperial status.

During the Thirty Years' War, in 1623, Derenburg was devastated by Imperial troops led by Colonel Heinrich von Schlick.