Ca. 1280, the Teutonic Order built a wooden watch tower on the site of a decrepit Prussian settlement. Later on, an agricultural and commercial village started to develop in the tower's vicinity. In 1327, the settlement was granted municipal rights and given the name of "Mohrungen" (Morąg). Piotr Stumpf was the lokator, i.e. the person responsible for managing the settlement. In the first half of the 14th century, defence walls were built around the town and in 1370, a brick castle was built by the Teutonic Order.
In 1440, the town came under the control of the Prussian Confederation. After the Thirteen Years' War (1454 – 1466), it was still controlled by the Teutonic State. In 1525, Morąg became a part of the Duchy of Prussia. The wars fought with Sweden in the 17th century led to the town's complete degradation, but later on, it was revived thanks to its importance for trade relations with Poland. Up until the middle of the 19th century, Morąg was considered a provincial town, but it is worth noting that it was the birthplace of Johann Gottfried Herder (1744 – 1803), an eminent German thinker, writer, philosopher, a representative of the social, philosophical and literary currents of the Enlightenment. In 1807 and 1812, Napoleon's Army marched through the town and in 1822, 1848, 1858, and 1868 fires broke out and destroyed large portions of Morąg.
In 1815, Morąg became the capital of the Morąski County. In the second half of the 19th century, the town started to thrive. At the time, it had 3,633 inhabitants. Two new rail routes were opened at the turn of the 19th century – one leading from Malbork to Olsztyn (in 1882) and one from Orneta to Ostróda (in 1902). The two routes met in Morąg. The town became a railway hub, which led to a number of infrastructural investments (a municipal gaswork was opened in 1904, a water supply network – in 1907, and an electric power system – in 1923). Nonetheless, industry was barely existent in the town (during the interwar period, there was only one sawmill in Morąg). In 1939, the town's population amounted to 8,376 people.
During World War II, in January 1945, Morąg was captured by Soviet troops, who destroyed ca. 45% of the town. Although most inhabitants had been previously evacuated, 26 nurses from the town hospital refused to leave Morąg and, in an act of desperation, committed group suicide shortly after the Red Army entered the town. In the Polish People's Republic, Morąg was the capital of the Morąski County, which was abolished in 1975. In 1999, the town became a part of the Ostródzki County in the Warmińsko-Mazurskie Province.
A. Weyde, Mohrungen in Ostpreussen, Leer .