In 1325, by order of the Grand Master of the Teutonic Order Werner von Orseln, Master Arnold von Eylenshtein began the construction of the Ile Castle on the site of the former Prussian fortress Sutwrit. The knights built a dam with a mill, which allowed them to raise the water level in the river and create an island for the castle. By 1330, the castle was built in a quadrilateral shape, surrounded by a water-filled moat, a drawbridge, and gates with grilles. A large outer bailey was added on the eastern side. Initially, the castle was named Ile, later Iladia, but eventually the name Preussisch Eylau became established.

Until 1347, the castle served as the residence of the order's pfleger, and then it housed the administration of the cammerata associated with the commandery of Balga.

The castle first demonstrated its resilience during the Thirty Years' War, withstanding multiple Polish attacks. In 1520, about four thousand cavalry besieged the fortress, but thanks to the defenders' selflessness, the castle held out.

In 1807, the bloodiest battle of the Fourth Coalition War took place in the vicinity of Preussisch Eylau, resulting in around 50,000 casualties. French troops under Napoleon fought against the Russo-Prussian army led by Bennigsen. In this bloody battle, there was no clear winner, but after Bennigsen's nighttime retreat, Napoleon declared himself the victor.

During the Great Patriotic War, the castle was heavily damaged. Restoration work only began in the 1990s.