Through most of its history Klaipeda was called Memel and was a German fort and  major Baltic Port that flourished owing to sea trade. The Teutonic Knights built the castle in 1253, and soldiers of the Livonian order were stationed there. Settlers from Holstein, Lübeck and Dortmund arrived, and in the 1260s Memel received Lübeck city rights. In 1323 Lithuanian troops devastated the town and besieged the castle.  More Lithuanian attacks followed in 1379 and 1389, until in 1422 the Peace Treaty of Melno-See settled the issue of the border between the Teutonic Knights and the Grand Duchy of Lithuania and Memel was rebuilt. Memel remained part of Prussia all the way to 1919.

The border city and port saw a long period of prosperity. When the town became part of the Kingdom of Prussia (1701), it was one of its strongest fortresses. Memel's favourable tax regulations attracted English traders, the first industrial sawmills were established, and timber export flourished. Memel was mentioned in Encyclopaedia Britannica of 1815 as "the finest harbour in the Baltic". Memel was Prussia's temporary capital during the Napoleonic Wars. After Germany's unification in 1871, Memel became the empire northernmost city.

With the end of World War I, the Treaty of Versailles made Memel and the surrounding area an autonomous territory. In 1923 it was invaded by Lithuanian forces, annexed and renamed Klaipeda. The predominantly German population of the city did not accept that easily, and when in 1939 Nazi Germany forced Lithuania to return the city and the area, they welcomed that development. Hitler arrived personally to make a speech from the theatre's balcony.

Much of the German population fled, was expelled or died during World War II, and after the Red Army captured the city in 1945, it became part of the Lithuanian SSR. New inhabitants arrived from Lithuania, Russia, Belarus and Ukraine. A giant shipyard was built, and Klaipeda became the foremost Soviet ice-free port in the Eastern Baltic.