The earliest signs of human settlement dating back to the 3rd–5th centuries AD have been found on the present theatre hill. Probably to protect that settlement, a wooden stronghold was built on the present Vallimägi. When it changed owners in 1220, the Danes started to erect buildings from stone. A settlement called Tarvanpea was first mentioned in the Chronicle of Henry of Livonia in 1226. The new Danish stronghold was called Wesenbergh in Middle Low German for the first time in 1252. The battle of Wesenberg between the Danish and German knights and Russians occurred nearby in 18 February 1268.
On 12 June 1302, Rakvere was granted Lübeck rights. When the Danish king sold Danish Estonia to the Livonian Order in 1346, a large castle was built on top of the previous stronghold. The Ordensburg was protected by towers and courtyards. The building of a Franciscan monastery was started in 1508.
During the Livonian War from 1558–1581, Rakvere was under Russian rule and was heavily damaged. Sweden, after the disastrous Siege of Wesenberg (1574), captured the town in 1581 before it passed to the Polish-Lithuanian Commonwealth in 1602; Poles destroyed the castle in 1605. After being returned to Swedish control in that year, a mansion was built on the ruins of the monastery. During the Great Northern War, Rakvere was burned down in 1703. With the Capitulation of Estonia and Livonia in 1710 and the subsequent Treaty of Nystad in 1721, Rakvere passed to the Russian Empire, where it remained until Estonia's independence in 1918 following World War I.
During the first period of independence many prominent buildings were built, such as the market building, the old bank building (current SEB Eesti Ühispank), and Rakvere Gymnasium. In 1930 the town stadium was opened. Local newspapers started to emerge, including the county paper Virumaa Teataja, which was first published in 1925. The idea of Rakvere's own professional theatre started to take shape as
