Per the Shinchō kōki, Katsuyama Castle was built in 1579 by Shibata Katsuyasu, a relative of Shibata Katsuie, one of Oda Nobunaga's leading generals, and Hara Nagayori was assigned as its castellan.

The Shibata clan were destroyed in conflicts with Toyotomi Hideyoshi, and after the Battle of Sekigahara, the entire province of Echizen was assigned by Tokugawa Ieyasu to his second son, Yūki Hideyasu in 1601 as Fukui Domain.

In 1624, Fukui Domain was divided, with Yūki Hideyasu's fifth son, Matsudaira Naomoto being awarded a 30,000 koku fief centered at Katsuyama.

Tadanobu's son, Ogasawara Nobutora received permission from the shogunate in 1708 to rebuild the castle on the pretext of restoring the old structures; however, due to fires and lack of funds, the castle was not completed until 1799, only to burn down again in 1822.

The current Katsuyama city hall now stands on the site of the inner bailey of the castle, with some remnants of the moat and ramparts remaining, along with the base of the donjon.