Castle Fraser was started in the mid-fourteenth century as a three storey rectangular Tower House. The surrounding lands, known as Muchall, were originally the property of Alexander Stewart, Earl of Mar. However, when he died in 1435 without a legitimate heir, the estates passed to the Crown. It was James II (1437-60) who granted both Muchall and Stoneywood to Thomas Fraser in the mid-fifteenth century. It was most probably Thomas who built the Tower House on the site which became known as Muchall-in-Mar Castle.
The castle was substantially upgraded in the sixteenth century by Michael Fraser, Sixth Laird of Fraser. He built two new towers on diagonally opposite corners of the existing Tower House to form a Z-plan castle. Work started on the project in 1575 but progress was slow and it was still incomplete when he died in 1588 leaving his son, Andrew Fraser, to complete the build in 1636. Andrew was elevated to Lord Fraser in 1633.
In 1897 Frederick Mackenzie Fraser died childless and his widow, faced with the extensive costs of maintaining the property, sold it in 1921 to Weetman Pearson, Viscount Cowdray. In the 1950s some work was undertaken to remove sections of the nineteenth century modifications. The castle was gifted to the National Trust for Scotland in 1976.