Wunsiedel was a part of the Hohenzollern Principality of Bayreuth until 1791/92 when the last margrave, Karl Alexander, abdicated and the region was placed under Prussian administration.

Birthplace of the nationalist student Karl Ludwig Sand (October 5, 1795) who later went on to assassinate August von Kotzebue, a famous conservative German playwright.

In 1817 at the Wartburg Castle, during a gathering of students, the burning of his published works with those of other "enemies" brought him to the attention of the young Karl Sand.

In retrospect, a case for post traumatic stress syndrome, as a complicating factor, could probably be made as Karl Sand witnessed, helplessly, the drowning of his good friend just months prior to the murder.

In the late 1980s, the cemetery of Wunsiedel became rather infamous after Adolf Hitler's deputy Rudolf Hess, who had died in a Berlin prison on 17 August 1987, was buried there.

The result was unexpected: neo-nazi groups managed to amass more and more people, the peak being reached in 2004, when over 4,500 participants from all over Europe assembled in Wunsiedel.

The anti-fascist initiative "Wunsiedel ist bunt, nicht braun" ('Wunsiedel is colourful, not brown') organised a counter-demonstration with about 800 participants, decorating the city with rainbow flags and spraying the marchers with confetti.

The initiative later received the Bündnispreis for commitment and bravery awarded by the German federal ministers Otto Schily and Brigitte Zypries.

[citation needed] In 2005, the memorial march was banned for the first time on the basis of article 130 of the German criminal code, which outlaws incitement of the people.

[3] Smaller neo-Nazi marches continued afterward, leading the human-rights group Rechts gegen Rechts to organise a charity drive whereby a certain sum of money would be donated to the organisation Exit Deutschland, which helps neo-Nazis leave the movement, for each meter marched.

Recent results are: The town's borough includes the following villages (year of incorporation in brackets): Bernstein (1978), Breitenbrunn, Furthammer, Göpfersgrün, Göringsreuth, Hauenreuth, Hildenbach (1978), Hildenmühle, Holenbrunn (1978), Johanneszeche, Juliushammer, Klause, Kösseinehaus, Krohenhammer, Luisenburg, Schneckenhammer, Schneckenmühle, Schönbrunn (1975), Sinatengrün, Stemmasgrün, Stollenmühle, Valetsberg, Walkmühle, Wiesenmühle, Wintersberg, Wintersreuth.

The economy of the town of Wunsiedel is dominated by the chemical (paint works, Dronco), clothing, porcelain, glass, stonemasonry and construction industries.

The new A 93 from Hof to Regensburg runs in a north-south direction, with exits at the Wunsiedel junction or state road S 2177 Hof–Wunsiedel The nearest train station, Wunsiedel–Holenbrunn, is located in the nearby village of Holenbrunn (about three kilometres away).