The Saunderson family acquired the original castle during the Plantation of Ulster. The original castle was inhabited by the O'Reillys of Breffni and was formerly known as Breffni Castle from the 14th century.  Robert Sanderson, who fought on the side of William of Orange, inherited the castle from his father in 1676. James II's troops burned the castle in 1689. Months later, 400 of King James's soldiers were ambushed here while on retreat from the battle at Newtownbutler.

A notable member of the family born there was Colonel Edward James Saunderson, a founder of the Ulster Unionist Party.

The present castle dates to 1840 and was destroyed by fire in 1990.

Located on the northern frontier of Ireland's Ancient East, on the border between Cavan and Fermanagh, in the heart of the UNESCO Geopark, the story of Castle Saunderson is marked by fire and blood, conquest and division, and, finally, peace, reconciliation and multi-culturalism, with an international scouting centre opened adjacent to the castle in 2012.

The Castle Saunderson Demesne (approx 103 acres) includes a church with crypt and family graveyard.

The development of the Castle Trail has seen the original walkways around the castle reinstated and charts the history of the Saunderson family.