The watermill in Lage was first officially mentioned in the year of 1270. It was about 200 years later that King Philip II of Spain, as ruler of the Netherlands, approved building of a mill on the river Dinkel. It is supposed that this was a reconstruction or expansion of an existing mill.

The current mill looks like it is from the late 17th century. A distinguishing feature is the two undershot waterwheels that drive both a flour mill and an oil mill. In the early years of the 20th century, electricity was also generated at the mill to supply the community of Lage. After World War I, the oil mill was shut down. The grist mill kept running until 1957, although the last years by a diesel engine. After the last miller’s death, the mill stood empty.

In 1962, when the building was threatening to fall down, the most urgent safety work started. Ten years later, Grafschaft Bentheim brought about a comprehensive restoration on the mill, giving it once more its two waterwheels and restoring the weir to improve flow rates. Nowadays the mill can be run again.

(Lage, or officially Herrlichkeit Lage), refers to the time between the end of the Thirty Years' War and the year of 1803, in which Lage was an independent small state with its own jurisdiction. Since the late 19th century large parts of Lage are Dutch-owned, since 1977 by the Dutch ‘Twickel Foundation’.)