The town is situated on the southeastern rim of the Bavarian Forest National Park near the confluence of the Saußbach and Reschbach creeks.

The inhabitants settled in a clearing village near the old Wolfstein Castle, which Bishop Wolfger von Erla had built around 1200.

As early as 1354, the neighboring town of Kreuzberg, which had been founded at the beginning of the 14th century, was granted market rights, which were transferred to Freyung in 1523.

When the Prince-Bishopric of Passau was dissolved in 1803 with the Imperial Deputation Act, Freyung first fell to the Austrian Duchy of Salzburg and two years the Kingdom of Bavaria with the Peace of Pressburg.

Freyung had received the oppurtunity to host the yearly Bavarian Regional Garden Show in 2022, however had to move it to 2023 because of Covid.