Until the end of the 17th century, Rastatt held little influence, but after its destruction by the French in 1689, it was rebuilt on a larger scale by Louis William, margrave of Baden, the imperial general in the Habsburg-Ottoman War known popularly as Türkenlouis.
It then remained the residence of the margraves of Baden-Baden until 1771. It was the location of the First and Second Congress of Rastatt, the former giving rise to the Treaty of Rastatt. In the 1840s, Rastatt was surrounded by fortifications to form the fortress of Rastatt. For about 20 years previous to 1866, it was occupied by the troops of the German Confederation.
The Baden revolution of 1849 began with a mutiny of soldiers at Rastatt in May 1849 under Ludwik Mieroslawski and Gustav Struve, and ended there a few weeks later with the capture of the town by the Prussians. (See The Revolutions of 1848 in the German states and History of Baden.) For some years, Rastatt was one of the strongest fortresses of the German empire, but its fortifications were dismantled in 1890.
In 1997, a new Mercedes-Benz car factory started production in Rastatt.
Rastatt and the surrounding area is home to a variety of historical buildings, includes palaces and castles such as Schloss Rastatt and Schloss Favorite. It lies in the vicinity of Rastatt is the Black Forest and the French border.