Sebnitz was first mentioned in a document of 1223/1241 outlining the borders between the kingdom of Bohemia and the diocese of Meißen. In 1451 it was first mentioned as a town. A new town hall was built in 1714/1715, but was destroyed together with numerous other buildings, among them the school house, in a fire in 1854. Around 1900 Sebnitz became a centre of the manufacture of artificial flowers. From 1952 until 1994 the town was the administrative centre of the district Sebnitz. Sebnitz hosted the Festival "Tag der Sachsen" in 2003.