The predecessor of the current observatory was originally opened in 1774 in the nearby city of Mannheim but degradation of observational conditions there resulted in a relocation to the Königstuhl in 1898.

On 20 June 1898, the "Großherzogliche Bergsternwarte" was ceremonially inaugurated by Frederick I, Grand Duke of Baden.

While the new observatory complex was still under construction Max Wolf obtained a grant of $10,000 from the American philanthropist Catherine Wolfe Bruce for the acquisition of a powerful new dual 16 in (41 cm) refractor telescope, the Bruce double astrograph.

[2] The main field of activity of the observatory was the investigation of nebulae and the search for asteroids.

Between 1912 and 1957, Karl Wilhelm Reinmuth discovered almost 400 asteroids from the Heidelberg-Königstuhl State Observatory.