Motte-and-bailey castles were a primitive type of castle built after the Norman invasion, a mound of earth topped by a wooden palisade and tower. Dún Dealgan motte is believed to have been constructed by Bertram III de Verdun (c.1135–1192), with a bailey to the northwest. It was a stronghold of Hugh de Lacy, 1st Earl of Ulster in 1210, but he left it when pursued northwards by King John. On 14 October 1318, it was the site of the Battle of Faughart, where the Bruce campaign in Ireland ended with the death of Edward Bruce. A local landowner named Patrick Byrne (often called a pirate, due to much of his wealth originating from smuggling) began to build a Gothic house atop the mount in 1780. It was damaged in the 1798 Rebellion, and only a castellated tower ("Byrne's Folly") remained. The house was rebuilt in 1850 by Thomas Vesey Dawson, but fell into disrepair and was bought by the County Louth Archaeological and Historical Society to be used for a museum. It was further damaged in the revolutionary period (1919–23) when it was deliberately set on fire.

The site is of importance in Irish mythology as the birthplace of the boy hero Cúchulainn. In the Irish Epic, ‘Táin Bó Cuailgne’ It was from his base at Dún Dealgan that Cúchulainn waged war against the forces of Queen Maeve of Connacht. It is possible that the name ‘Dun Dealga’ was perhaps a reference to a Firbolg chieftain named Dela or Dealga.