Stadtlohn consists of 9 districts: The town was founded as Lohn by Liudger, the first Bishop of Münster about the year 800.

On August 6, 1623 during the Thirty Years' War the Battle of Stadtlohn (German: Schlacht im Lohner Brook) saw Johan Tzerclaes, Count of Tilly's imperial troops victorious over Duke Christian of Brunswick's men.

In 1742 regular pilgrimages started to a statue of Mary in a small chapel in Stadtlohn from various towns in the Münsterland.

In World War II, Stadtlohn was hit by bombs as early as 1940 and 1942, but the damage was limited.

In March 1945, however, Stadtlohn was affected by two massive allied airstrikes that destroyed 86% of the town.