The castle was used as administrative offices for the collection of rent and dues from local tenants, and was also a residence and a garrison.

A vaulted audience chamber sat above a watergate[2][5][7] — "a fortified gate... for use of people and supplies arriving by boat".

[5] Within the castle were a great hall, kitchen, a gallery, chambers and, after the 15th century works by Humphrey Stafford, "a series of luxurious" apartments, those used by the lord being in the south tower.

[6][12] Its exact location is uncertain,[7] but a common theory is that it was built at Stow Hill close to St Woolos Church, about 0.5 miles (0.80 km) southwest of the later castle.

[14] According to Trett, "It is recorded in the Welsh Brut y Tywysogion that in about 1172 King Henry II visited Castell Newyd ar Uysc (New Castle on the River Usk).

In 1185 the king’s accounts show that six pounds fourteen shillings and sixpence were spent on repairs to the castle of Novi Burgi (i.e. Newport) and its buildings and bridge.

That same year, Prince Edward occupied the castle, and in 1295, when he was the king, he ordered improvements and repairs.

[6] The second castle at Newport, commonly known as Newport Castle, was built in the 14th century,[11][16] possibly by Hugh de Audley, 1st Earl of Gloucester,[5][nb 1] after de Audley took control of Despenser's lands in 1326,[11] or, more probably,[6] by his son-in-law and successor Ralph, Earl of Stafford.

[14] It was primarily the lordship's administrative centre,[5][7] an adjunct to their main estate for collecting local tenants' dues and rent.

[2][10][5] Seized by Henry VIII in 1521, the castle was held by the king[14][18] until 1547 when it was then possessed by Edward VI.

[6][14] In 1645, during the Civil War, Colonel Henry Herbert established a garrison of 50 troops at the castle, which was taken by Oliver Cromwell's forces in 1648.

In 1891, the south tower came into the ownership of the Corporation, and the rest of the castle was bought by Lord Tredegar in 1899.

When I would go alone at night to see The moonlight, like a big white butterfly, Dreaming on that old castle near Caerleon, While at its side the Usk went softly by: In about 1796 J. M. W. Turner made a "picturesque, romantic" painting of the ruin,[5][21] as did other artists.