The division occurred because Count Otto V of Holstein-Schaumburg had died in 1640 leaving no male heir.

Initially Schaumburg-Lippe's position was somewhat precarious: it had to share a wide variety of institutions and facilities with the County of Schaumburg (which belonged to Hesse-Kassel), including the representative assembly and the highly productive Bückeberg mines, and the Landgrave of Hesse-Kassel retained some feudal rights over it.

To counter these threats, Frederick's grandson, Count William (who reigned 1748–1777) retained a standing army of up to 1000 troops – quite a lot for such a small territory.

With William's death in 1777, the junior line Schaumburg-Lippe-Alverdissen inherited the county, thereby reuniting Schaumburg-Lippe with Lippe-Alverdissen.

Under the constitution of 1868, there was a legislative diet of 15 members with ten elected by the towns and rural districts, one each by the nobility, clergy and educated classes and the remaining two nominated by the prince.