Fellheim is located along the former fortification line of the Danube–Iller–Rhine Limes, on the right side of the Iller between Kellmünz and Memmingen.

After several changes in ownership, the Reichlin von Meldegg barons ultimately took ownership of Fellheim beginning on January 25, 1555, following the transfer of the feudal letter from the Princely Abbey of Kempten.

During the Thirty Years' War, the village was completely devastated and, from 1636 to 1643, no one lived in Fellheim.

To increase the population, Baron Phillip Bernhard von Reichlin-Meldegg settled five Jewish families in Fellheim in 1670.

Subsequent administrative reforms in Bavaria established the current municipality of Fellheim in 1818.