The settlement stretches in the upper Drava Valley (Drautal) between the Kreuzeck mountain range in the north, part of the High Tauern, and the Gailtal Alps in the south.

The present-day settlement may have arisen from a mansio called Bilachium on the Roman road from Sanctium (Villach) along the Drava River up to Littamum (Innichen), at the strategically important branch-off to Kreuzberg Pass.

Greifenburg Castle was first mentioned in an 1166 deed, then located within the lands held by the House of Gorizia (Meinhardiner); it was acquired by the Carinthian duke Bernhard von Spanheim about 1230.

Upon the death of Meinhard's heir Duke Henry in 1335, Greifenburg, with the Carinthian lands, passed to the Austrian House of Habsburg in 1335.

In 1537 the Habsburgs enfeoffed their treasurer Count Gabriel von Salamanca-Ortenburg with the estates; his heirs held Greifenburg Castle until 1626.