The town is situated within the historic Greater Poland region, located on the small Dojca river, a headstream of the Obra, about 72 kilometres (45 mi) southwest of Poznań.

The current settlement was established about 1285 on a causeway across the swampy Dojca River, probably by Cistercian monks descending from Obra Abbey.

It developed as a centre of wool trade and cloth manufacturing on the road from Poznań to Lusatia, vested with market rights in 1424.

The Polish population was subjected to various crimes, including arrests, expulsions and deportations to Nazi concentration camps.

[8] Notable Polish sculptor and painter Marcin Rożek, who lived and worked in Wolsztyn, was arrested by the Germans and then imprisoned in the Fort VII in Poznań and the Auschwitz concentration camp, where he died in 1944.

The town has a Baroque parish church of the Immaculate Conception dating from the 18th century, a historical palace of the Gajewski and Mycielski noble families, which now houses a hotel, with an adjacent park, as well as several museums.