The idea of the Künstlerdorf was first expressed in 1983, on the occasion of the 400th anniversary of the Old Town Hall. The mayor at the time, Hans Dillmann, the head of the adult education center, Dr. Claus Urban and the director of the Literaturhaus Düsseldorf, Rolfrafael Schröer, discussed plans in order to install a city clerk and a city artist in Schöppingen.
This concept also took up the tradition of the town clerks, who went from place to place in order to write down the orally told and handed down story(s) of a community and to provide new perspectives on experiences and realities.
The founding idea coincided with the withdrawal of a NATO unit, which between 1963 and 1987 had temporarily brought over a thousand Dutch and American soldiers with their families to Schöppingen. The idea of the Künstlerdorf, as an urban gem, took shape with the vacancy of Hof Schulze-Johann and the additional purchase of Hof Schulze-Dorfkönig in the center of Schöppingen. The purchase and the functional expansion of the mensions was made possible by urban renewal funds from the state of North Rhine-Westphalia and funds from the municipality. The state of North Rhine-Westphalia with its then Prime Minister Johannes Rau made the politically significant decision to support art and culture beyond the big cities, but with radiance beyond the state borders.
From 1989 to 1998 the Künstlerdorf Schöppingen was organized as a nonprofit association. Founders and members of this association were the Friends of Künstlerdorf Schöppingen Association (founded on 9/27/1988), the municipality of Schöppingen, the district of Borken, the North Rhine-Westphalia Foundation and the Westphalia-Lippe Regional Council. Since 1998 the Künstlerdorf has been organized as a foundation in which the state of North Rhine-Westphalia, the North Rhine-Westphalia Foundation for Nature Conservation, Heritage and Culture, the municipality of Schöppingen, the district of Borken, the Regional Association of Westphalia-Lippe and the Friends of the Künstlerdorf Schöppingen Association are involved. Representatives of these and other institutions belong to the board of trustees and the foundation board. Chairwoman of the board of trustees is Christina Rau who has played a key role in the development of the Künstlerdorf since its inception. The North Rhine-Westphalia Foundation owns the two buildings and makes them available to the Künstlerdorf Schöppingen Foundation.
Rolfrafael Schröer, who became the first managing director of the artist village from 1989 to 1997, was involved in the conceptual and planning phase and beyond. He was followed from 1997 to 2020 by Dr. Josef Spiegel. Julia Haarmann has been the managing director of the Künstlerdorf since 2021.