Under Wettin rule, the city acquired the two-tailed, red and black lion which graces its coat of arms.

Neustadt lay on a major trade route between Nürnberg and Leipzig, and in the 14th century, the city received a parish church.

By the time the Thirty Years' War began, Neustadt's population had grown to roughly 1000.

A referendum, held in 1919, saw Neustadt (and the rest of the Free State of Coburg) decide, by overwhelming majority, against Thuringia and thus for Bavaria.

Neustadt politician and industrialist Max Oscar Arnold had actively campaigned for union with Bavaria.