The municipal area is situated in the upper valley of the Gurk River within the Nock Mountains range (part of the Gurktal Alps).

The remote and densely forested area of the upper Gurk Valley was settled by Celtic colonists when the region was part of the Noricum kingdom, which in 15 BC was incorporated as a province of the Roman Empire.

In the High Middle Ages, when the area was part of the Duchy of Carinthia, the valley belonged to the estates of Millstatt Abbey.

The village of Reichenau (possibly derived from German: Rauch, "smoke" referring to slash-and-burn agriculture) was first mentioned in a 1332 deed.

A chapel in the neighbouring village of Sankt Lorenzen at a height of 1,477 m (4,846 ft) (today the highest situated parish church in Carinthia) was already documented in 1216.