Archaeological evidence indicates that there was a small community in this area in the 8th century. The first church was built in the mid to late 9th century AD. In the mid 13th century, the Katharina Church was of sufficient size to incorporate burials within its grounds. on 4 Jul 1290, Emperor Rudolf v. Habsburg granted a charter permitting Steinau to hold a weekly market. Some motivation for this may have been Steinau's importance on the Frankfurt-Leipzig Road. It is this document that is recognised as the official foundation document of the community.
Also of note is the fact that the Brothers (Jacob and Wilhelm) Grimm, famous for their collection of fairy tales and forklore, lived in Steinau during their childhood. The family of Phillip Grimm returned to his boyhood home, his father being a minister in Steinau, as the court clerk appointed to the City. The family lived in the Amtshaus from 1791 until 1796 when Phillip died. While Jacob and Wilhelm would move to Hanau to live with their aunt to finish their education, the rest of the family remained in Steinau from 1796-1805 living in a home that still stands today on Brückentor - "Die Alte Kellerei". It is one of many of the remarkable Fachwerkhaeuser - half-timbered houses - that can be found throughout the town.