When Tokugawa Ieyasu became independent of the Imagawa clan in 1561, he established Nishio Castle, and assigned his close hereditary retainer, Sakai Masachika to become its first castellan.
The domain changed hands with almost every generation, reverting for periods to tenryō status under direct control of the Tokugawa shogunate.
The final daimyō, Matsudaira Noritsune, took part in the Second Chōshū expedition, and was assigned to guard Osaka and Kyoto, but presided over domain deeply divided between pro- and anti- Shogunal factions.
He surrendered to the new Meiji government during the Boshin War, after the defection of many junior samurai to the pro-Imperial cause.
The domain maintained its primary residence (kamiyashiki) in Edo at Daimyo-koji, in Marunouchi.