Ootmarsum has a long history. Around 770 one of the first churches in the region Twente was built here and in the year of 1000 Ootmarsum was one of the largest parishes.

Ootmarsum received city rights in 1325. The town was then converted into a fortress with ditches and earthworks. In the 16th century Ootmarsum was occupied by the Spanish during the Eighty Years War, but in 1597 was captured by Maurits, Prince of Orange.

Nowadays it is a popular tourist destination; well known for its meandering streets and narrow alleyways lined with historical buildings like the H.H. Simon en Judaskerk and former town hall. Nowadays the center of Ootmarsum offers lifestyle shops and a lot of galleries.

Ootmarsum was a separate municipality until 2001, when it became a part of Dinkelland.