The town is centred upon the historic villages of Oberkaufungen and Niederkaufungen, which are joined by modern housing developments to form a significant conurbation.

In 1017 Henry II, Holy Roman Emperor and his queen Cunigunde of Luxemburg founded Kaufungen Abbey, a Benedictine convent, perched on the steep edge of the Losse valley above what is now the centre of Oberkaufungen.

At various points in its history, Kaufungen has been a local centre for mining, glass-making, charcoal burning, forestry and paper manufacture.

The farming settlement of Niederkaufungen, situated slightly downriver where the narrow Losse valley begins to open out into the wide, flat plain of the Fulda, is of more recent origin.

The main attraction in Oberkaufungen is the early eleventh century Stiftskirche church which hosts regular classical music concerts.