Bruneck was founded by the Prince-Bishop Bruno von Kirchberg of Bruneck, and was first mentioned on 23 February 1256. At that time, the town consisted of two rows of houses forming a narrow lane. The town walls and moat were completed in 1336 under Bishop Albert von Enn. Soon thereafter, further rows of houses were built outside the eastern gate. These led to the small Church of Our Lady (today's Church of the Assumption of Mary). The first church inside the town walls (at first only a small chapel) was built beneath the castle by the Brunecker burgher Niklas von Stuck. This church is today the Rainkirche. In 1358, Heinrich von Stuck, brother of Niklas, brother, funded the hospital/almshouse that was built in the following years. Soon the town received the right to hold a weekly market and impose high justice. A castle leader occupied the fortress as the bishop's representative.
In the 14th and 15th centuries, there was brisk trade between Augsburg and Venice. Some of the traded goods were brought through the Puster Valley and often stored long-term in Bruneck on the Ballplatz. This soon brought the town prosperity and fame. In this time, the Puster Valley painting school was founded by the painter Hans von Bruneck and others. The great masters Michael and Friedrich Pacher studied at this school. In 1500, the Puster Valley was reunited with Tyrol because of a testamentary contract between the house of Habsburg and the counts of Görz-Tirol. The town of Bruneck remained an episcopal possession.
In 1610, Bruneck, which had previously belonged to the parish of St. Lorenzen, became a parish in its own right. The first parish priest documented was Johann Herlin in 1613. In 1626, the Capuchin order came to Bruneck. The Fathers built themselves a monastery at the "Spitalangerle", which still exists today. In 1741, a convent was built by the Ursulines. On 11 April 1723, the worst fire in the town's history occurred. In Oberragen, not far from the church, a fire broke out, which was soon spread by the strong east wind across a large part of the town, mostly destroying it. During the long-lasting Napoleonic Wars the town suffered no material damage, but as a marching station went into great debt because of housing and feeding soldiers and infantrymen for many years.
After World War I, South Tyrol and so also Bruneck became part of the Italian State, getting the Italian name. The city was spared damage in World War I, but in World War II the town was bombed, leading to loss of both life and property.