The first evidence of the construction of the residence in Mosbach can be traced back to when the town's fortification was erected by Count Palatine Otto I early in the fourteenth century. The context of the castle's first reigning occupant helps amplify its importance today and at the time it was first built.
A scion of the House of Wittelsbach, from the age of eight Otto I was a prince and youngest son of the King of Germany (rex Romanorum). The father of Otto I, Rupert II of the Palatinate, was crowned in Cologne in 1401 and reigned from 1400 until his death in 1410. Thus, Otto I was born into a prestigious family of noble pedigree with many important aristocratic rulers in his family tree and among his relations. His family's sphere of influence stretched from Sicily to central Europe, throughout Germany and into the Scandinavian countries, where his nephew Christopher was crowned King of Denmark, Norway and Sweden and ruled there from 1410 to 1418. Thus sea-change developments were part of his heritage. One example was the choice of Copenhagen as the seat of government in Denmark, a decision made by his nephew when Christopher's residence in Roskilde burned down. Another landmark event was the partition of Saxony and Thuringia, again this was an event in which his ancestors were directly involved.
Otto I was born the son of the future King and Queen of what was then "Germany," and was the progeny of highly influential burgraves and nobility in Nuremberg and Thuringia and was raised among family members whose future regencies would influence events at many Europe centers. In his family alone Otto found himself in the presence of his mother Elisabeth of Nuremberg, whose family annals were steeped in legend, partly moneyed by the rich silver mine of Freyberg, and on its own already had tremendous influence. Otto had eight brothers and sisters all older than himself by as much as fifteen years. With parentage stretching back to at least the Margrave of Meissen and colorfully named ancestors from the House of Wettin bearing names such as "Otto the Rich" (silver mining), "Albrecht the Proud," or "Dietrich the Hard-Pressed," who once took control of Leipzig through deception, he even had one ancestor, his mother's great great grandfather, Albert II (the "Degenerate", most likely given this name due to his decision to abandon his wife for another woman) who lived to be 74 years old, boding well for Otto's own long life of over 70 years. Thus, despite the fairly early instances of death in his direct family, Otto could rely on inherited longevity and thus hope to live longer than the abbreviated life of his eldest brother Ruprecht (1375–1397), who died when Otto was a six-year-old, or his brother Friedrich (1377–1401) and sister Agnes (1379–1401), whose funerals he likely attended or knew about when he was only 10 or 11 years old, and two more deaths in his immediate family - that of his sister-in-law Blanche, daughter of King Henry IV of England, who was given away to marry his older brother at the Cathedral in Cologne when she was only ten and herself Royal Princess of England (1392–1409), and the death of his sister Elisabeth (who had been married only two years when she died at the age of 27 or 28) in 1409.
Through the partition of King Rupert's lands among the four surviving sons at the time of his death, Mosbach came to be the center of power for that portion of the Palatinate inherited by Otto, with Mosbach Castle as the sovereign's residence. Count Palatine Otto I, who was born in Mosbach in 1390 and then chose to have his residence there as the heir to the Palatinate Electorate in 1410, and his son Otto II, had the Castle expanded considerably after 1430, although the work done on the building was not intended to exude grandness.
The most influential period for the Castle came in 1427 when, alongside the duties involved in administering the Palatinate-Mosbach, Otto I assumed the guardianship of his nephew Louis IV (Ludwig IV) and held the regency by default while his brother Louis III was too weakened and ill to rule upon his return from a crusade to Jerusalem in 1427. Otto I's nephew was still a minor and did not reach the age of majority until 1442. Starting in 1448 the sphere of influence of the Palatinate of Mosbach and its residence once again expanded when Otto I inherited half of the territory of the extinct Palatinate-Neumarkt and purchased the other half from his brother Stefan (Stephen), establishing a further residence in Neumarkt.
The castle's present-day appearance largely stems from renovation carried out in 1898, including bay windows, half-timbered walls and transverse gables.