The ruins are located on a high, rocky spur which today is covered in woods, about 1 km northeast of the village of Neustadt on the southern edge of the Harz mountains.

Its foundation is attributed to Konrad von Sangerhausen, a relative of the legendary Thuringian count, Louis the Springer.

Whilst the Counts of Hohnstein saw out the end of their reign at Lohra Castle (they died out in 1593), Hohnstein Castle was sold into the possession of the Counts of Stolberg, who modernised the fort militarily and structurally at great expense (including an artillery tower) and turned it into a typical Renaissance Schloss.

Because Vitztum knew that he could not hold the castle for any length of time he placed the Counts of Stolberg under pressure so that he could extort money from them in return for handing it over.

The Stollbergs could not (or would not) meet this ultimatum, so Vitztum had his soldiers set fire to the already heavily plundered castle on Christmas Eve of 1627.