Around 965, chronicler Abraham ben Jacob visited Hedeby and described it as, "a very large city at the very end of the world's ocean.

"[1] The settlement developed as a trading centre at the head of a narrow, navigable inlet known as the Schlei, which connects to the Baltic Sea.

The location was favorable because there is a short portage of less than 15 km to the Treene River, which flows into the Eider with its North Sea estuary, making it a convenient place where goods and ships could be pulled on a corduroy road overland for an almost uninterrupted seaway between the Baltic and the North Sea and avoid a dangerous and time-consuming circumnavigation of Jutland, providing Hedeby with a role similar to later Lübeck.

Because of its historical importance during the Viking Age and exceptional preservation, Hedeby and the nearby defensive earthworks of the Danevirke were inscribed on the UNESCO World Heritage List in 2018.

The Old Norse name Heiða-býr simply translates to "heath-settlement" (heiðr "heath" and býr = "yard; settlement, village, town").

Godofredus) destroyed a competing Slav trade centre named Reric, and it is recorded in the Frankish chronicles that he resettled the merchants from there to Hedeby.

The Danevirke joined the defensive walls of Hedeby to form an east–west barrier across the peninsula, from the marshes in the west to the Schlei inlet leading into the Baltic in the east.

Hedeby became a principal marketplace because of its geographical location on the major trade routes between the Frankish Empire and Scandinavia (north-south), and between the Baltic and the North Sea (east-west).

Along with Birka and Schleswig, Hedeby's prominence as a major international trading hub served as a foundation of the Hanseatic League that would emerge by the 12th century.

People taken captive during the Viking raids in Western Europe, such as Ireland, could be sold to Moorish Spain via the Dublin slave trade[15] or transported to Hedeby or Brännö in Scandinavia and from there via the Volga trade route to Russia, where slaves and furs were sold to Muslim merchants in exchange for Arab silver dirham and silk, which have been found in Birka, Wollin and Dublin;[16] initially this trade route between Europe and the Abbasid Caliphate passed via the Khazar Kaghanate,[17] but from the early 10th-century onward it went via Volga Bulgaria and from there by caravan to Khwarazm, to the Samanid slave market in Central Asia and finally via Iran to the Abbasid Caliphate.

[20] More than 340,000 pieces related to comb making, tools for working leather, remains of ironworking and goldsmithing, and mercury from fire gilding were also found.

Graves that are lavishly furnished with jewelry, commodities, weapons and armor set apart from more humble inhumation sites indicate an established degree of stratification among Hedeby’s society.

Beads made of varying materials such as carnelian, rock crystal, amber, jet, silver, brass, bronze, and mosaic glass have been found in the harbor excavation sites, burials, and throughout the settlement.

He set the town on fire by sending several burning ships into the harbour, the charred remains of which were found at the bottom of the Schlei during recent excavations.

Klaus Raddatz, Heiko Steuer, and Konrad Weidemann investigated much of the cemetery site at that time, but their findings have not been published in detail.

The embankments surrounding the settlement were excavated, and the harbour was partially dredged, during which the wreck of multiple Viking ships were discovered, including the Hedeby 1.