At the time, Blekinge was part of the Kingdom of Denmark under Scanian Law, and Lyckeby became the seat of Lyckå Län.

Due to its location on the borderland between Denmark and Sweden, Lyckeby was often subject to raids and fighting between the two kingdoms.

In 1545, under the orders of Danish King Christian II, the castle was rebuilt on its old foundations by privy council member Ebbe Knudsen Ulfelt.

In 1600, Lyckeby lost its town privileges, because Christian IV preferred to focus on developing the recently founded Christianople.

In old Lyckeby, north of the castle, archaeological digs were undertaken in the early 1970s, and archaeologists found cobblestone roads and the remains of houses with field stone foundations.