Founded by a cousin of William the Conqueror in 1086, it was later owned by the Clan Hall, before being rebuilt in 1830 by Thomas James, a magistrate, on the site and using some of the stones from Otterburn Castle.

[6] From the tower, a short walk by a burn leads to the moor; fishing is available on 3 miles (4.8 km) of riverbank along the Rede.

[2] In August 1388, during the Battle of Otterburn, initially, the Scottish forces had camped near the Redesdale valley close to the tower, in the evening.

The village then witnessed fierce battle between "the English and Scots, under the command of Henry Percy and Earl Douglas in which the former was taken prisoner and the latter was killed", on 19 August 1388.

[3][9] The scene of the battle, as reconstructed by historians, mentions that it took place about 0.5 miles (0.80 km) northwest of Otterburn village.

One of its notable owners was Mad Jack Hall, a Jacobite rebel who was tried five times and finally executed at Tyburn for high treason on 13 July 1716, and his initials are still carved over one of the original doors.

[citation needed] William James of Otterburn Towers, a Lt. of 42nd Highlanders, served in the Crimea and Indian Mutiny on 28 Feb 1838 and 9 April 1864, respectively.

[15] In 2024, plans were announced to transform the castle into "a world-class wellness destination" with wedding venues, cabins, a spa, and festivals.