The village of Keilhau, situated below steep shell limestone mountains on the Schaalbach, has been mentioned as Kylhewe/Kylhowe since 1366/67. Further mentions: 1411 Kylhouwe, 1529 Keylhau. The name is said to mean an outcrop in the forest in the shape of a wedge. Until the 19th century, agriculture was the sole source of livelihood for the inhabitants. When the reform pedagogue Friedrich Fröbel moved the General German Educational Institution he had founded in Griesheim to Keilhau in 1817, the village became famous. Over the next few decades, a former farmstead was transformed into an ensemble of buildings with classrooms and dormitories, where pupils from all over Germany were taught a new type of education based on democratic principles.

Even after Fröbel's departure in 1831, the school was able to continue its successful tradition until 1939. During the Second World War, the house served as a teacher training college and military hospital, after the war as a training center for new teachers and from 1948 as a boarding school. Since 1956, children with speech impediments have been taught here according to Fröbel's pedagogical teachings. The entire school complex with its museum and monuments is a listed building.

The village church, which took on its present form in the 18th/19th century, can always be seen in conjunction with the school. The village's historic cemetery, where important teachers from the Keilhauer Anstalt are buried, is also noteworthy.

Keilhau has been incorporated into Rudolstadt since October 1, 1993.