Having been built on a heavily wooded ridge of a steep hill overlooking left bank of the shallow Una river, the castle was located on a strategic site connecting the northern and southern parts of the long Una valley.

The first mention of the castle was in a charter from 1407, in which King Ladislaus of Naples, confirmed possession over Ostrovica to a Bosnian magnate and Grand Duke, Sandalj Hranić, who most likely rebuilt the fortress at the beginning of 15th century on a foundations of an ancient fortification, which dates back to ancient Roman times or even earlier.

The first mention of the castle was in a charter from 1407, in which King Ladislaus of Naples, confirmed possession over Ostrovica and Skradin to a Bosnian magnate and Grand Duke, Sandalj Hranić, who received it as a dowry for his second marriage, this time to a niece of Hrvoje Vukčić Hrvatinić, daughter of Vuk Vukčić Hrvatinić, Katarina Vuković in May 1405.

After them, proprietors of the castle were also Juraj Mikulčić (who died in 1495), Ivan Keglević, and members of House of Frankopan, among others.

After Donji Lapac had been returned to Croatian control (being within Habsburg monarchy), the Ottomans moved the seat of captaincy away from the nearby Croatian-Bosnian frontier to Prkose, a stronghold in the same-named village, situated northeast of Ostrovica.

Moreover, the whole territory of Turkish Croatia, including Ostrovica, Bihać, Banja Luka and so on, was given to direct Habsburg imperial control, as a part of Bosnia and Herzegovina.