While historians suspect the area to have been settled as early as the neolithic period, nothing is known of the origins of the modern-era town.
During the sixteenth and seventeenth centuries, however, the town also gained economic wealth through the salt and linen trade, and it became the seat of the counts of Königsegg-Rothenfels in 1664.
The counts were deposed during the French Revolutionary Wars, and Immenstadt briefly became Austrian before joining Bavaria in 1805.
Notable historical sites in the municipal area include the Maria Loreto pilgrims' chapel and the ruins of the Rothenfels, Hugofels, Laubenberg, and Werdenstein castles.
It is the seat of the district newspaper, Allgäuer Zeitung [de][5] and of a Bosch factory that is also the town's biggest employer.