Frankenmuth was settled in 1845 by 15 Germans, led by the Reverand August Craemer, a Lutheran minister. The small band of settlers came to the area from Neuendettelsau, Germany, for the expressed purpose of evangelizing to the Native Americans. The first structure built was a church, and the second a school. Only seven years after their arrival, Frankenmuth boasted 80 cabins and farmhouses.

On January 3, 1854, Frankenmuth residents formally organized as a Township. On January 14, 1904 the Village of Frankenmuth came into existence. City status became effective on October 1, 1959 after a vote of the people approved the measure.

The City of Frankenmuth is directed by a City Council made up of its Mayor and six Councilmembers. The Mayor is elected every two years and Councilmembers serve four year terms. The City Council appoints a manager to operate the daily affairs of the City.