Many Medieval structures remain intact, giving the city a unique view.

Wasserburg consists of 22 Ortsteile: The town was first mentioned in a document (now considered to be a fake) in 1137, when Hallgraf Engelbert moved his residence from the nearby castle Limburg to his "Wasserburg" (Water Castle).

It is one of the most historic towns of Old Bavaria – somewhat older than Munich, continually fought over by the Bavarian nobility and, up to the 16th century, on an equal footing with larger cities.

At the junction of the main overland route with the main water route, Wasserburg became the most important trade centre with the Balkans, Austria and Italy, a means of attaining power and wealth for the shipping owners and merchants.

Gustav Meyrink's most esoteric novel The White Dominican (German: Der weiße Dominikaner) is set in a mystical version of the town of Wasserburg.