Founded in 1214 by Count Hermann IV of Ravensberg to guard a pass crossing the Teutoburg Forest, Bielefeld was the "city of linen" as a minor member of the Hanseatic League, known for bleachfields into the 19th Century. Bielefeld was part of the Kingdom of Westphalia when it was created in 1807. In 1815 it was incorporated into the Kingdom of Prussia following the defeat of France and the Congress of Vienna.
After the Cologne-Minden railway opened in 1849, the Bozi brothers constructed the first large mechanised spinning mill in 1851. The Ravensberg Spinning Mill was built from 1854 to 1857, and metal works began to open in the 1860s.
Founded in 1867 as a Bielefeld sewing machine repair company, AG Dürkoppwerke employed 1,665 people in 1892; it used Waffenamt code "WaA547" from 1938 to 1939 as the Dürkopp-Werke, and merged with other Bielefeld companies to form Dürkopp Adler AG in 1990.
Between 1904 and 1930, Bielefeld grew, opening a rebuilt railway station, a municipal theatre, and finally, the Rudolf-Oetker-Halle concert hall, renowned for its excellent acoustics. The Dürkopp car was produced 1898–1927. After printing emergency money (German: Notgeld) in 1923 during the inflation in the Weimar Republic, Bielefeld was one of several towns that printed very attractive and highly collectable banknotes with designs on silk, linen and velvet. These pieces were issued by the Bielefeld Stadtsparkasse (town's savings bank) and were sent all around the world in the early 1920s. These pieces are known as Stoffgeld – that is, money made from fabric.
The town's synagogue was burned in 1938. In 1944, B-17 Flying Fortresses bombed Bielefeld on September 20 (the gas works) and October 7, and the RAF bombed on December 4/5. In 1945, B-17s bombed the nearby Paderborn marshalling yard, the "Schildesche Railway Viaduct" was bombed on January 17, 1945, and on March 14 the Grand Slam bomb was used for the very first time against the viaduct. American troops entered the city in April 1945.
Due to the presence of a number of barracks built during the 1930s and its location next to the main East-West Autobahn in northern Germany, after World War II Bielefeld became a headquarters town for the fighting command of the British Army of the Rhine – BAOR (the administrative and strategic headquarters were at Rheindahlen near the Dutch border). Until the 1980s there was a large British presence in the barracks housing the headquarters of the British First Corps and support units, as well as schools, NAAFI shops, officers' and sergeants' messes and several estates of married quarters. The British presence was heavily scaled back after the reunification of Germany and most of the infrastructure has disappeared.
In 1973 the first villages on the south side of the Teutoburg Forest were incorporated.