In February 1534, a group of radical Anabaptists seized control of Münster in the middle of the religious chaos of the Reformation. They expelled or forcibly rebaptised the rest of the population, abolished private property, declared the town the New Jerusalem, and prepared for the end of the world. Their leader, a Dutch tailor named Jan van Leiden, declared himself king, took multiple wives (polygamy was made law), and minted his own coins. The bishop of Münster, who had been driven out of his own city, gathered an army and laid siege to the walls. The siege lasted sixteen months. Inside, food ran out, then everything ran out. The end came in June 1535, betrayed from within. Jan van Leiden, Knipperdolling, and Krechting were tortured to death in January 1536 in the Prinzipalmarkt with red-hot pincers. Their bodies were hung in the cages above. The Anabaptist movement, broken by the catastrophe at Münster, would mostly turn pacifist in the years that followed. Modern Mennonites are descendants of that turn.

A century later, in May 1648, Münster again became the site of an event that reshaped Europe. The Thirty Years' War had been grinding through central Europe since 1618, killing perhaps a third of the population in some regions, and the peace negotiations between the Holy Roman Empire and France took place in Münster while parallel talks between the Empire and Sweden took place 30 miles north in Osnabrück. On 15 May 1648, the Spanish-Dutch treaty was sworn in Münster's Rathaus. On 24 October the larger Treaty of Münster between the Empire and France was signed. Together with the Osnabrück treaty, they make up what historians call the Peace of Westphalia, the moment most often cited as the birth of the modern European state system: the recognition that sovereigns held supreme authority within their borders and the principle that religion within each state was the prince's business, not the Empire's. The room where the Spanish-Dutch treaty was sworn, the Friedenssaal in the Rathaus, is still there, with the original oak panelling and the portraits of the negotiators on the walls. Diplomats from around the world still come to see it.

The city itself is far older than the events that made it famous. In 793 Charlemagne sent the Frisian missionary Liudger into the Münsterland to convert the local Saxons. In 797 Liudger founded a school which eventually became the Cathedral School and is still in operation. The settlement that grew up around it was called Mimigernaford, then Münster, after the monasterium that Liudger had built. It became the seat of a bishop in the early ninth century and the centre of a prince-bishopric that, by the late Middle Ages, controlled most of the surrounding Westphalian countryside. The St Paul's Cathedral that now stands at the heart of the old city is the third on the site; the present building was raised between 1225 and 1264 and combines late Romanesque and early Gothic elements. Its astronomical clock, made between 1540 and 1542, still keeps time and still plays a tune at noon when the figures of the Three Kings emerge to pay homage to the Madonna.

On 10 October 1943 the United States Eighth Air Force flew one of its first "city-busting" missions against Münster. The town's railway yard was a major target but the bombers struck the old city centre as well. Münster's Luftwaffe air defences and the Luftwaffe fighters that came up to meet the American formations were unusually effective that day. The 100th Bomb Group, flying B-17s from Thorpe Abbotts in Suffolk, lost 13 of the 14 aircraft it sent on the mission. The episode became famous in the literature of the Eighth Air Force as one of the worst days the bomber crews ever had. The 100th would later be commemorated in the 2024 television series Masters of the Air. Münster's old city did not survive. A second raid on 25 October 1944 and continued bombing through to the end of the war destroyed roughly 63 per cent of the city, and 91 per cent of the historic centre. The US 17th Airborne Division, fighting as infantry alongside the British 6th Guards Tank Brigade, took the ruined city in house-to-house fighting on 2 and 3 April 1945.

After the war, Münster did something unusual. Many German cities damaged in the bombing campaign were rebuilt as modernist cityscapes, with the old street plans replaced by ring roads, glass office blocks, and wide boulevards. Münster chose instead to rebuild its old city centre in its pre-war form. The Prinzipalmarkt, the long arcaded merchant street that had been the heart of the city since the late Middle Ages, was raised again in its medieval guise, with the same gabled fronts, the same arcades, the same proportions. The Rathaus and St Lambert's were restored. The Cathedral was repaired. Modern shops and offices fill the buildings, but from the outside the Prinzipalmarkt looks much as it would have to the citizens of 1648. It is one of the most striking pieces of conservation reconstruction in postwar Germany, and most foreign visitors do not realise, looking at the buildings, that none of them existed in their current form before about 1950.

Münster has roughly 320,000 inhabitants and, by most estimates, slightly more bicycles than that. The flat Westphalian landscape, the size of the student population at the University of Münster (around 45,000 students at a single institution), and the extensive Promenade, a green ring of cycle paths that follows the line of the demolished medieval city walls, have made cycling the dominant mode of urban transport. In 2007 vehicle traffic in the city fell below bicycle traffic for the first time, 36.4 per cent against 37.6 per cent. The city has had a Latvian secondary school, one of the largest Latvian libraries in the West outside Latvia, a substantial British garrison until 2013, and a saying that goes: "Entweder es regnet oder es läuten die Glocken. Und wenn beides zusammen fällt, dann ist Sonntag." Either it rains or the church bells ring, and if both happen at the same time, it's Sunday. The bells of St Lambert's still ring across the rooftops. The three cages still hang from the spire.