After the time of Absalon, Bishop of Roskilde and Archbishop of Lund, peace was brought to the area in the 11th century, fishing families settled at the mouth of the river Vassa as herring fishing became the main source of trade. Ystad was not mentioned in documents until 1244, in a record of King Eric's visit to the town with his brother, Abel. A Franciscan monastery, Gråbrödraklostret, was founded in 1267, and Ystad joined the Hanseatic League in the 14th century.
The charter of 1599 gave the town the right to export oxen. Ystad, together with all of Scania, was transferred from Denmark to Sweden following the Treaty of Roskilde in 1658.
By 1866 Ystad had a railway connection and it was established as a garrison town in the 1890s. After World War II, ferry services to Poland and to the Danish island of Bornholm were opened