For a long period of time it was under the control of the Warmian Bishops and it was also a major economic center, only resigning its importance to the nearby city of Braniewo.

[4] This caused the Polish–Teutonic Thirteen Years' War, as a result of which in the Second Peace of Thorn (1466) the Teutonic Order ended its claim to the area and recognized it as part of Poland.

In the mid-18th century a manuscript of the Gesta principum Polonorum, the oldest medieval Polish chronicle was discovered in the castle by Prince-Bishop Adam Stanisław Grabowski, by whose decision it was then published in print for the first time.

In 1807 a battle took place near the town between the French under Joachim Murat and Nicolas Jean de Dieu Soult and the Russians and Prussians under Levin August, count von Bennigsen.

The main landmark of Lidzbark Warmiński is the Gothic Castle of Warmian Bishops with adjacent fortifications, towers and the Baroque Grabowski Palace.