The first documented mention of the small village with the name "Schönau" was in 1362. The starting point for the development of the settlement in the Schönaugrund at that time was an iron hammer, which was listed below the castle "Hallenburg" and which is one of the oldest witnesses to the traditional iron trade in the region. The village was called Unterschönau from 1584 on.

Today Unterschönau is due to the beautiful location between Oberhof and Steinbach-Hallenbergand by the proximity to the Rennsteig a popular starting point for hiking and mountain biking tours and skiing.