 In 1427 the area around historic Lauenstein Castle was acquired by the Hohenzollern Elector Frederick I of Brandenburg, who added it as a northern exclave to his Franconian Principality of Kulmbach.Ludwigsstadt received town privileges in 1490, which it again lost in 1525, as the citizens joined a rebellion against the landlords during the German Peasants' War.In 1622 Margrave Christian of Brandenburg-Bayreuth, colonel of the Imperial Franconian Circle, finally purchased Ludwigsstadt.