Hrádek is regarded as the oldest settled place in the Nisa valley. Slavic and Sorbian tribes used to live in the area as early as in the 10th century. The town was burned down and destroyed during the Hussite wars. It started to develop again in the 16th century. In the 18th century a lignite coal mine was opened there. Lignite coal was mined till 1972. In the 19th century a lot of factories were set up in Hrádek. Some of them have been preserved up to now.

Nowadays Hrádek nad Nisou is a border town frequently visited by tourists from Germany and Poland. It lies near the western part of Lužické hory; Grabštejn Castle and Chateau are located nearby.