The formerly agrarian town today has one of the largest oil refineries (PCK Raffinerie GmbH) in Germany, established in 1958 and connected to the Russian Druzhba pipeline network.

In a 1974 municipal reform, the neighbouring village of Heinersdorf was incorporated into Schwedt, followed by Blumenhagen, Gatow and Kunow in 1993, by Kummerow in 1998, by Criewen and Zützen in 2001, Stendell in 2002, the former town Vierraden in 2003, Schöneberg in January 2021 and Berkholz-Meyenburg, Mark Landin and Passow in April 2022.

In 1481 the Thuringian counts of Hohnstein acquired the estates; they granted town privileges to Schwedt as well as to neighbouring Vierraden and introduced the Protestant Reformation.

The rise of Schwedt came to an end with the extinction of the Hohnstein counts in 1609 and the disastrous Thirty Years' War, when the town on the road from Stettin to Berlin was plundered several times.

Six years later the Swedish field marshal Johan Banér set the town on fire, after its citizens refused to capitulate.

Near the end of World War II, over two months of heavy fighting destroyed an estimated 85 percent of the town, including the Schwedt Castle.

During the 1960s, the government of the DDR expanded housing and encouraged people to move to Schwedt, a trend that ended with German reunification.