Mining of copper, lead and silver in the area around Lautenthal started about 1225. In the middle of the 14th century, however, the Harz was depopulated because of plague and mining came to an end.
Mining in the Harz was started again in 1524. Lautenthal was founded in 1538 as a mining settlement on the river Laute, a small tributary of the Innerste, and had already been given the status of a town by 1580. Sixteen years later it became a free mining town. The town was enlarged in 1560 and a rectangular market place was laid out. A comparatively large town hall was built in 1570. The building was transformed into a hotel later. In 1626, the town was plundered by the troops of Johann Tserclaes, Count of Tilly in the Thirty Years' War. The Protestant town church was built 1649-59. In 1690, 28 mines were operated in and around Lautenthal. In 1821, the town had 2.006 inhabitants. The railway line to Lautenthal, Innerste Valley Railway, was inaugurated in 1875 and extended to Altenau in 1914. Railway bridges were built over the Laute and the Innerste. Tourism gradually developed creating more and more jobs. At the beginning of the 20th century, Lautenthal had 2.626 inhabitants.
With the closure of the mines in 1959 the town lost its significance and was incorporated into the borough of Langelsheim in 1972. In 1976 the railway line to Lautenthal was closed and the former railway station was transformed into a hotel.