At the end of the 12th century, Neustadt became part of the sovereign territory of the burgraves of Nuremberg, the dynasty of the Hohenzollern.

At the end of the 15th century, Margrave Albrecht Achilles and Kurfürstin (Electress) Anna completed Neustadt as a stronghold.

In 1934, the town was the scene of an organized boycott against all Jewish merchants, and violence broke out against Christian Germans who patronized stores owned by Jews.

Ultimately all of the Jews of Neustadt were expelled, many relocating to Nuremberg, and the Jewish synagogue was razed to the ground.

In the 1980s and 1990s, the infrastructure was improved on a grand scale: a beltway was built, and a pedestrian area around the market place was created; the cultural program was extended, and the old town was rehabilitated; new residential zones and business parks were established.