Obwalden is one of the two valleys, along with Nidwalden, that make up Unterwalden. Throughout its history, the political situation and the exact amount of independence has varied widely. Between 1291 and 1309, Unterwalden joined the nascent Swiss Confederation. During that time Obwalden was known as Unterwalden ob dem Kernwald and Nidwalden was Unterwalden nit dem Kernwald. Unterwalden's votes in the Tagsatzung were split between the two valleys. Between 1798 and 1803 it became the District of Sarnen in the Canton of Waldstätten. From 1803 until 1999 it was the half-canton of Obwalden. In 1999, the new Federal Constitution eliminated the half-canton designation and made Obwalden a full canton, though they still shared representation in the Council of States and only had half a vote. Due to the complex history of Obwalden there is some overlap between the histories of Obwalden, Nidwalden and Unterwalden.

The earliest archaeological traces in Obwalden is a stone knife from the 8th millennium BC, which was found in Brand by Lungern. Two Horgen culture sites from the 4th millennium BC have been found in the Canton. An ax and two bone blades were found in Giswil and a hammer-ax was found in Wilen. It appears that the valleys in Obwalden were at least temporarily inhabited during this time, but no evidence of agriculture or permanent settlements have been found. An Early Bronze Age grave in Foribach in Kerns implies that there was a settlement in the surrounding area between 2000 BC and 1700 BC. There may have also been a settlement along the shores of Lake Sarnen during the same period. Between 1500 and 1100 BC there were several other settlements, including houses in the Rengg Pass and high alpine herding camps above the pass. Many of the place names in the canton have Celtic or Gallo-Roman roots.

Around 700, the Alamanni began to migrate into Obwalden. They initially settled around the lakes while the Gallo-Romans lived up on the plateau. The Alamanni influence is noticeable around Lake Sarnen and the Kerns plateau where many place name end in -ingen, -wil and -hofen. The Gallo-Romans remained around Mt. Pilatus, the Giswilerstock and in the Melch valley. During the 8th to 11th centuries, the two populations intermarried and eventually all became Germanized. By the 9th century it was part of the Second Kingdom of Burgundy. It became part of the Holy Roman Empire following the winter military campaign of 1032-33 by Emperor Conrad II. Obwalden was given to the Counts of Lenzburg from Aargau. The counts built a castle on Landenberg hill to help them control the land.

During the Early Middle Ages, much of the land in Obwalden was controlled by monasteries (especially Murbach-Lucerne and Beromünster Abbey). The monasteries began to spread their authority and parishes into Obwalden during this time. St. Peter's Church in Sarnen was first mentioned in 1036, but was built on top of an 8th-century church. St. Mary's Church of Alpnach was probably built in the 8th or 9th century. The churches in Kerns, Sachseln and Giswil all became parish churches by the 12th century and a church was mentioned in Lungern in 1275. During the 14th century, Engelberg Abbey began to acquire rights over the parishes in Obwalden. By 1415 the Abbey had de facto control over the appointment of parish priests in the entire valley. In 1460, this became de jure authority over all the parishes in the valley. In the early 12th century the Counts of Lenzburg granted a large part of their lands in Obwalden to their monastery at Beromünster. In 1210 the Lenzburg castle at Landenberg was abandoned. However, in the 13th century several small castles were built for the minor nobles. The Kellner of Sarnen (Obedientiaries of the main family) lived in the Lower Castle in Sarnen. In Giswil the Lords of Hunwil lived in Hunwil Castle while the Meier of Giswil, a Ministerialis (unfree knights in the service of a feudal overlord) family, lived in Rosenberg Castle. In Lungern, the Lords of Vittringen had a castle.

The political community of Sarnen (de Sarnon locorum homines) were first mentioned in a Papal bull in 1247, when they and the citizens of Schwyz were excommunicated for supporting Frederick II against their ruler, Rudolf of Habsburg-Laufenburg. In 1257, the Habsburgs had to grant their landlord rights in Obwalden to several of their vassals, all minor nobles. During the 13th century, Obwalden was home to a unified local political organization with enough autonomy to act against the best interests of their nominal rulers. The nobility in the canton were all minor nobles with limited power. This changed on 16 April 1291 when Rudolph I of Habsburg bought the Unterwalden (containing both Obwalden and Nidwalden) from Murbach Abbey. This made him the chief landowner, the count and the emperor over the valley. Fearing a loss of their freedoms, on the 1 August 1291 Nidwalden (Obwalden is not named in the text of the document, though it is named on the seal appended to it) formed the Eternal Alliance with Uri and Schwyz. This alliance is considered the beginning of the Swiss Confederation and modern Switzerland.

Initially the Eternal Alliance was a mutual defense pact between the three cantons, each of which was independently ruled. In 1304 the two valleys of Obwalden and Nidwalden were joined together under the same local deputy of the count. In 1309 Emperor Henry VII confirmed to Unterwalden all the liberties granted by his predecessor, though the exact terms are unknown. The Emperor also granted the valleys imperial immediacy which placed Unterwalden on equal political footing with Uri and Schwyz. In 1314, Duke Louis IV of Bavaria (who would become Louis IV, Holy Roman Emperor) and Frederick the Handsome, a Habsburg prince, each claimed the crown of the Holy Roman Emperor. The Confederates supported Louis IV because they feared the Habsburgs would annex their countries as Habsburg property. War broke out over a dispute between the Confederates of Schwyz and the Habsburg-protected monastery of Einsiedeln regarding some pastures, and eventually the Confederates of Schwyz conducted a raid on the monastery.

In support of their allies, Unterwalden joined the Confederates in the Battle of Morgarten and drove back an invasion of the Brünig Pass. After the decisive Confederation victory over the Habsburgs, Unterwalden renewed the Eternal Alliance in the Pact of Brunnen. During the 14th century, the communities in Obwalden grew increasingly powerful at the expense of the nobility. The formerly powerful Kellner of Sarnen family retired from politics after 1307. The White Book of Sarnen mentions the conquest of the Lower Castle in Sarnen, the home of the family, which may explain why they left politics. The Strättligen and Ringgenberg families married into the Lords of Hunwil and used the power of the dynastic marriages to reduce Habsburg power to a vague suzerainty in the 1330s and 40s, though the Habsburg still owned some land in Obwalden. During the early 14th century, an organization of livestock farmers developed in the Hunwil lands. Throughout the century, their political power grew as they acquired more land and grew wealthy. The organization eventually became an alternative political structure and following conflicts between the organization and the Hunwil nobles, in 1382 the Landsgemeinde excluded the Hunwils from holding political or court offices.[4] During the 13th and 14th century Obwalden established its own local governance, despite having had a joint assembly with Nidwalden up to around 1330.

Swiss History Timeline - Obwalden
Obwalden coat-of-arms