Primitive grinding stones known as Schalensteine or Hexensteine were found in the Tarasp area. This indicates that stone age food processing happened in the area. However, there are no records or indications of settlements in the area until the 11th Century.
The Lordship of Tarasp Castle was established in the 11th century and for centuries claimed by the Bishopric of Chur and the Counts of Tyrol. After the Lords of Tarasp had become extinct, their estates were a Tyrolean fief from 1239 on. Under the rule of the Habsburg archdukes of Austria, also Counts of Tyrol since 1363, Tarasp from 1464 on was an Austrian exclave inside the Free State of the Three Leagues, an associate of the Old Swiss Confederacy. In 1687 Emperor Leopold I of Habsburg granted the Lordship of Tarasp to the Princes of Dietrichstein as an immediate territory of the Holy Roman Empire.
In the course of the 1803 Reichsdeputationshauptschluss and the Act of Mediation, Austria finally ceded the territory to the Napoleonic Swiss Confederation, after which it was incorporated into the canton of Graubünden.
The neorenaissance-style Grand Hotel Waldhaus Vulpera-Tarasp with Sgraffito-Elements was opened on June 8, 1897 and was one of the first addresses in the Swiss Alps and was a major Belle Époque monument in Europe.