The Great Northern War had run for twenty-one years by 1721, and it had emptied Sweden of men and money. The peace that ended it was negotiated and signed in Uusikaupunki, and it is known ever since as the Peace of Nystad. Nothing about the town suggests such a role; it had been founded barely a century earlier, and the local business was fish, tar, boats and the wooden vakka containers that gave the whole surrounding region its name, Vakka-Suomi. But diplomacy needs a neutral, reachable, unimportant place, and a Bothnian harbour on the edge of the theatre served perfectly. Uusikaupunki's other brush with great-power politics came in 1855, when British and French naval forces raiding the Finnish coast during the Åland War attacked the town.

On 28 July 1855 a fire started in a baker's oven on Sepänkatu. When it stopped it had taken ninety-three buildings and the town hall. What Uusikaupunki did next is the reason people come now. The architect Georg Theodor von Chiewitz drew a new town plan in 1856, laying out the burnt district on a grid of large blocks separated by streets deliberately made too wide for flame to cross. The houses that went up inside that grid were wooden, single-storey, painted in ochre and pale grey, and built to the restrained Empire style then fashionable. Roughly forty blocks and six hundred buildings survive, which makes this one of the best-preserved wooden Empire town centres in Finland. A rebuilt town hall followed in 1857, and the New Church was finished in 1863; the Old Church, from the 1600s, had survived the fire.

For a couple of decades after the fire, Uusikaupunki was one of the busiest shipbuilding towns in the country. Between 1857 and 1876 five yards operated here simultaneously, turning out wooden sailing vessels for a merchant marine that ranged the Baltic and beyond. At its height the town's registered fleet was the third largest in Finland, behind only Viipuri and Raahe. This was the world Volter Kilpi wrote about from just down the coast in Kustavi, where farmers and shipowners gambled entire fortunes on a single hull. Steam and steel eventually ended it, as they ended every wooden shipbuilding town on this sea, but the trade left the place with a habit of building complicated things to order for customers somewhere else, and that habit turned out to be durable.

Bernhard Henrik Crusell was born here on 15 October 1775 into a poor family of bookbinders, which in the eighteenth century was not a background that led anywhere in particular. He became the finest clarinettist in northern Europe. Crusell rose to principal clarinet of the Swedish Royal Court Orchestra, studied with Franz Tausch in Berlin and Jean-Xavier Lefèvre in Paris, toured widely, and wrote three clarinet concertos that are still played by anyone serious about the instrument. Before Sibelius, he was the most internationally known composer Finland had produced. He died in Stockholm on 28 July 1838. Since 1982 the town has honoured him with Crusell Week each summer, a festival of woodwind music that fills the wooden streets with clarinets for a fortnight.

The harbour still works, though what leaves it now is mostly cars. Uusikaupunki has been an automotive town since 1968, when a joint venture between Valmet and Saab-Scania put an assembly plant on the northern edge of town; it remains Finland's only car factory. The railway that once served all of it opened in 1925 and lost its passenger service on 1 January 1993, so arriving today means the bus from Turku, an hour and ten minutes down the coast. From the guest harbour, boats run out to Isokari, whose 1833 lighthouse stands 24 kilometres offshore, and to the Katanpää batteries in the Kustavi outer archipelago. Up at Myllymäki, old windmills stand on the ridge above the wooden town, which is exactly the right vantage point for understanding it.