The history of Muszyna is closely connected with a trade route going along the Poprad River from Poland to Hungary. The town was first mentioned in 1209, and it reportedly owes its name to moss growing on the banks of streams surrounding Muszyna (the Latin for moss is ‘mosci’). According to another theory the town was named after the nickname of a Cracow bishop, Jan Muskata. In 1288 the town was bequeathed in testament by Wysz Niegowicki (a Cracow schoolman) to Cracow bishops. In the 14th century king Władysław the Elbow-high incorporated the land into the royal domain as a result of his conflict with Bishop Muskata. Muszyna was granted town privileges during the reign of Casimir the Great. It was only in 1391 that king Władysław Jagiełło gave again the Muszyna domain (two towns and 35 villages) to the Cracow diocese. From that time the Muszyna region, also called the Muszyna State, was ruled by starostas (‘elders’) on behalf of Cracow bishops, and it enjoyed a large degree of autonomy. It had its own administration, military and courts. The most well-known starosta was Stanisław Kępiński, a friend of Jan Kochanowski and the hero of his epigram To the Starost of Muszyna (‘Oh, the Starost of Muszyna, you know wine so well...’). In the 15th century the land of the Beskid Sądecki mountains witnessed a large migration wave of Vlachs and Ruthenians from Transcarpathian Ruthenia and Rumania (the Vlach migration). Those immigrants, sometimes called the Lemkos, were being settled under Vlach Rights in mountainous lands which were difficult to farm. They were Orthodox Christians and left wooden Orthodox churches (tserkovs). The Starosty of Muszyna was owned by Cracow bishops until 1781 when as a result of the Partitions of Poland it was transferred to Austria. From that time on it was gradually losing its importance.
Muszyna became a spa resort in the 1920’s thanks to the efforts of Mayor Antoni Jurczak and Doctor Seweryn Mściwujewski. In 1930 it joined the Union of Polish Spa Resorts. In 1932 first wells for mineral water were drilled. The first wells were named Antoni (after the first name of Mayor Jurczak) and Wanda (after the first name of Doctor Mściwujewski’s wife).
The Nazi German occupation left all spa equipment completely destroyed. The town returned to spa resort activity only in 1958. It is used mainly by patients with respiratory and digestive tract ailments.