The castle changed hands several times in the late 15th and early 16th centuries during the contests for land and supremacy between the warring O'Neill and O'Donnell clans.
In 1610, under the scheme for the Plantation of Ulster, the area was granted to Sir John Davies, Attorney General for Ireland, under King James I.
"[3] In 1622, Derg Castle was described as, "a bawne of stone & lyme, not finished, being 100ft long, 80ft broad & 5ft high, with 3 open Flankers of the same height.
"[4] During the Irish rebellion of 1641, Derg Castle was a place of refuge for the local Scottish settler community.
[5] In 1689, during the Williamite War, Derg Castle was again garrisoned by the settler population, but surrendered to James II's forces on being promised that their lives would be spared.