The current baroque palace, Schloss Werneck, designed by Balthasar Neumann, was built in 1733–45 by Prince Bishop Friedrich Karl von Schönborn.

On 28 November 1802, the last Prince-Bishop of Würzburg, Georg Karl von Fechenbach, released his vassals there from their oaths of service and recommended them to the new regional overlord, Maximilian, Prince-Elector of Bavaria.

Beginning in 1853, the palace was converted into a hospital for the mentally ill, the Unterfränkische Landes-Irrenanstalt (Lower Franconian State Asylum), which opened on 1 October 1855.

Its first director was Bernhard von Gudden (who later wrote the clinical assessment which justified deposing King Ludwig II and who drowned with him in Lake Starnberg).

In 1940, the approximately 800 patients were murdered on the orders of Otto Hellmuth, Gauleiter of Mainfranken, as part of the Nazi elimination of mentally ill and handicapped people, Action T4.

Although the villages within the municipality of Werneck are still agricultural in character, there have been several decades of economic dependency on industries in Schweinfurt, to which many residents commute.

There is a railway station on the Schweinfurt - Würzburg line in the centre of Eßleben and another very close to Werneck proper, on its border with Waigolshausen.

Today the psychiatric clinic (Krankenhaus für Psychiatrie, Psychotherapie und Psychosomatische Medizin Schloss Werneck) is operated by the Administrative Region of Lower Franconia and serves northeast Lower Franconia (Schweinfurt, Hassberge, Rhön-Grabfeld, Bad Kissingen and Kitzingen, with a total population of 500,000) with a modern 290-bed building, while the palace houses the Lower Franconia orthopaedic clinic (Orthopädische Klinik Schloss Werneck), one of the largest such facilities in Germany, with 153 beds.