There are a lot of uncertainties surrounding the early history of the Upper Castle (Felsővár) in Kőszeg.

Some say that the fortification may have been a Celtic place of worship, others claim it was a royal seat, or perhaps a stronghold dating back to the 9th century when the Magyars settled in the Carpathian Basin.
It was first mentioned in Hungarian documents in 1248 as Castrum Kwszug. It must have existed during the Mongol Invasion as King Bela IV recaptured the castle from Frederick of Babenberg in 1242.
Its function may have been to control a transport route in the hills, later referred to as the “Footpath of Knights”, that went around the swampy valley. The subsequent owners, the Németújváris must have realised that the stronghold atop the hill had lost its significance and, following the drainage of the marshland, they built the Lower Castle (Alsóvár). Despite this development, the Upper Castle continued to be used for at least another 200 years.

After this period, however, the building gradually deteriorated as reflected by the abandonment of the word castle, reduced to the simple reference Óház (Old House or Altes Haus). With the rise of the middle class, tourism was picking up as a leisure-time activity.The most ardent locals advocating tourism were Kálmán Chernel and mayor Károly Fügh. Owing to the development on the hill fostered by these gentlemen, the Old House soon became a favourite destination. To mark the thousandth anniversary of the founding of Hungary, a decision was adopted to build a lookout tower, and on 8 September 1896 the edifice, hailed as the blazon of the free royal town, was opened to the public.

The lookout tower had operated until 1917 when it was destroyed in a storm, and on the 100th anniversary of the building of the former tower, the new one, which still stands on a hill near Kőszeg, was inaugurated.