Although the region around the city has been populated since prehistoric times, Rheine was first mentioned in a document signed by Louis the Pious in 838. On 15 August 1327 it received its town charter from Louis II, Bishop of Münster.
The settlement was near to the crossing of two old merchant roads and a ford over the river Ems. Frankish soldiers initially secured this strategic point by a barrack yard. Later a church and more buildings were added to this outpost.
At the end of the Thirty Years' War the city burned down almost completely. Swedish and Hessian troops besieged imperial soldiers who had entrenched themselves in Rheine. On 20/21 September and 19 October 1647 glowing cannonballs set fire to the city and 365 houses were destroyed.
During the industrialization the textile industry prospered. It remained an important economic factor until the second half of the 20th century. Today engineering industries and services form the largest part of economy in Rheine.