As a counterpart to Stein Castle, the count's administrative seat, the Niderhus was built on the opposite side of the river in the 12th century, first mentioned in 1265 as "Lower Fortress" (Niderhus).[2] Initially, servants of the Counts of Lenzburg lived there. The building came into the possession of the Counts of Kyburg through inheritance in 1173. In 1264, the Habsburgs took over the management of the building, and nine years later they owned it entirely. When the city fortifications were expanded around 1360, the Niderhus was included as a bridgehead in the fortifications. Access to the bridge was through an archway, a wall led from the building to the Lägernkopf and thus completely sealed off the passage on the right bank of the Limmat.[3][4]
When the Confederates conquered the Aargau in 1415, the Niderhus suffered considerable damage, but was then repaired. It served as the seat of the bailiff of the County of Baden.[2] In 1484 there were plans to give up the dilapidated Niderhus and instead rebuild the destroyed Stein Castle. But finally, two years later, the decision was made in favor of the much more cost-effective option, the construction of a new building and the extension of the building on the Limmat to the "Landvogteischloss". The expansion was completed in 1490.[4]
In the years 1533 to 1535 and 1549 to 1551, Aegidius Tschudi, who also became famous as a chronicler, was the head bailiff. In 1579–1580, a round stair tower was added to the east side. In 1690–1692, in the course of the expansion of the municipal fortifications, bastions with drop bridges were built directly next to the castle on the access roads to Ehrendingen and Wettingen, amid strong protests from Zurich, but with the approval of the Catholic towns. After the Second War of Villmergen of 1712, Zurich, Bern and Glarus shared the dominion. The bailiff and his staff were the only reformed inhabitants of Baden at that time. The bastions were demolished again. In 1733–1734 another wing was built on the northeast side.[4]
After the French proclaimed the Helvetic Republic in 1798, the castle lost its purpose. In 1804, it came into the possession of the Canton of Aargau. Three years later it was bought by the city of Baden and used as a school building. After 1857 it served as a prison. Attempts to sell the increasingly dilapidated building at auction for a profit failed several times. Finally, in 1909–1912, the architect Otto Dorer carried out a comprehensive restoration in order to prepare the castle for its future function as a museum.[3][5]