The first written mention of Lunden is by the Archbishop of Bremen and dates back as early as 1140.

The place name probably comes from the Danish "Lunn" (island-like survey) or "Lund"(little forest).

In 1513, a Franciscan Friary was constructed in Lunden, fulfilling a vow made by the Dithmarscher soldiers at the Battle of Hemmingstedt in 1500 to donate a monastery in honor of Mary of Nazareth if they won the battle.

On 27 February 1529 Lunden was granted a town charter by the National Assembly of Dithmarschen.

From 1806 to 1816, the famous Lutheran theologian Claus Harms served as pastor of Lunden.