Västervik was first mentioned in 1275. The town was then located at the current location of Gamleby. In 1433 Eric of Pomerania decided to give it a charter and move it to its current strategically important location, close to the castle of Stegeholm. In the ensuing centuries Västervik suffered attacks from hostile armies. It was more or less completely destroyed five times between 1450 and 1677. Despite this, king Gustav Vasa established a ship industry here in the 16th century, from which ships sailed to Germany and the Baltic countries, and from the 17th century they sailed to Portugal too. In the 18th century a long period of peace allowed the ship industry to expand, increasing the ship routes down to the Mediterranean Sea. The population of Västervik in 1800 was 2 985 which by 1880 went up to 6 189 because of the industrial advancement and in 1920 it had reached 11 889. Building the railroad to Hultsfred, Norsholm and Vimmerby 1879-1906 changed the flow of people moving in and out. After being reduced 1920-1940 the population grew 1970 up to 20 577 inhabitants. Dockyards, papermill, fishing, nail factory, stone masonry, match factory, mechanical garages became the foundation of the towns industrial advancement. Västervik belongs to the Diocese of Linköping and the people have felt a belonging to both Småland and Östergötland.
Every year since 1966 there is a folk music festival in Västervik, at the ruins of the Stegeholm castle. The city still bases much of its industry on its harbour, and on the industries that were established as a result of it in the late 19th century. Recently, however, Västervik has suffered the closure of certain factories, notably Electrolux, with associated job losses. Being a summer town popular with yachtspeople, campers, daytrippers, and returning former residents, Västervik experiences an annual revival in July. Just outside Västervik, there is the static inverter of HVDC Gotland and Fårhultsmasten, a 335 m tall guyed mast used for FM/TV-transmission, which shares with three other masts the title of Sweden's tallest structure. The area has artistic talent by artists, potters, craft people and painters. Västervik offers an outdoor life of climbing, canoeing and sailing or islands to visit and stay at. Björn Ulvaeus band member of international ABBA who grew up in Västervik is building a complex consisting of hotel, restaurant, and apartments in the bay near Stegeholm castle, which will be a tourist attraction for Västervik.