The federal highway 96 passes Hainewalde in the north, the Czech border is approximatively 15 km west of it.

Settlers of the German feudal eastward-expansion established Hainewalde as a so-called "Waldhufendorf" by stubbing the forest along the river Mandau.

Saxony took control of Upper Lusatia, and therefore Hainewalde, after the treaty of Prague (1636) which resulted in the restriction of the personal and religious freedoms of the residents.

On 26 March 1933, it was occupied by the Nazi-German stormtroopers from Dresden, which set up a provisional concentration camp for political prisoners.

On 10 August 1933, the KZ Hainewalde was closed and served as "Wehrertüchtigungslager" until the end of World War II.