The town was founded asLohn byLiudger, the firstBishop of Münster about the year 800. About 985Gescher was split fromLohn, which in turn (1231) split intoSüdlohn (literally "South-Lohn") andNordlohn (literally "North-Lohn"). The name Stadtlohn (literally "Town-Lohn") is first mentioned in 1389 after the small townNordlohn was secured by amoat, adefensive wall and gates and gained the town rights. About 1406 Stadtlohn was burned down byCountHeinrich I of Solms-Ottenstein because he feuded with the bishop of Münster. BishopHeinrich III of Münster verified its town rights in 1491.
In 1584 Stadtlohn was pillaged by the troops of DukeErnest of Bavaria and again in 1588 by Dutch soldiers. In 1591 Spanish soldiers attacked the town. For a few months of 1598 Spanish troops were stationed in the town during theEighty Years' War. In 1611 a serious fire destroyed 225 of 235 houses.
On August 6, 1623 during theThirty Years' War theBattle of Stadtlohn (German:Schlacht im Lohner Brook) sawJohan Tzerclaes, Count of Tilly's imperial troops victorious overDukeChristian of Brunswick's men. About 6.000 soldiers died that day. In 1742 regular pilgrimages started to a statue ofMary in a small chapel in Stadtlohn from various towns in theMünsterland. The adoration of theVirgin Mary ended in 1886 when the statue was stolen from the Hilgenbergchapel.
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. About 600 inhabitants lost their lives. On March 31, 1945 British forces marched into the town.
Former Jewish Cemetery in the town center. Close by there is a sightworthy commemorative plaque inHagenstrasse street reminding on the synagogue which was destroyed in 1938.
Former pilgrimage chapelMarienkapelle on Hilgenberg hill.