The 12th century brought economic, scientific and social prosperity to parts of Europe and is regarded as a kind of early Renaissance in the Middle Ages. The Crusades led to increased exchange with the cultures of the Middle East, which were more developed in many respects. Arab scholars brought translations of Greek thinkers such as Aristotle to Europe via southern Spain and Italy. Roman law was rediscovered. The first universities were founded in Italy. Agricultural knowledge allowed the development of towns and larger settlements. One of these settlements was located north of the Wilten monastery between the Inn river and the Nordkette mountain range.

When the Western Roman Empire collapsed in the 5th century, Bavarian tribes took control of the area that is now Innsbruck. They were happy to take over church institutions and structures, as clerics were often the only ones who knew the scriptures. In the time of Charlemagne (748 - 814), the feudal system began to establish itself in Central Europe. The dukes of Bavaria were feudal lords of the German kings and emperors, whose empire extended over large parts of central Europe and northern Italy.

Tyrol had two low Alpine crossings, the Reschen Pass and the Brenner Pass, which were important for the imperial connection between the German lands in the north and the lands in Italy. In 1024, Conrad II, a rival of the Bavarian dukes, was elected king. In order to bring these two Alpine crossings away from his Bavarian rivals and under the control of the Church, which was closer and more loyal to the emperor, Conrad II granted the territory of Tyrol to the bishops of Brixen and Trento as a fief in 1027. In order to administer their lands and exercise jurisdiction, the bishops needed local representatives, the so-called bailiffs. The bailiffs of the Bishop of Brixen were the Counts of Andechs. They came from the area around the Bavarian Ammersee. They administered the central part of the Inn Valley, the Wipp Valley and the Eisack Valley for the bishops. Over the next 200 years, this Bavarian princely family was to become the birthplace of the city of Innsbruck.

Today, Innsbruck stretches along both sides of the Inn. In the 11th century, this area was under the influence of two lords of the manor. To the south of the Inn, the Wilten monastery had its lordship. The area north of the Inn belonged to the Counts of Andechs. While the southern part of the town around the monastery was used for agriculture early on, the alluvial area of the unregulated river could not be cultivated before the High Middle Ages and was sparsely populated. The Andechs family founded the market here in 1133 Anbruggen and connected the northern and southern banks of the Inn via a bridge. The unusable agricultural land had become a trading centre. The bridge greatly facilitated the movement of goods in the Eastern Alps. The customs revenue generated from trade between the German and Italian towns allowed the settlement to prosper. Innsbruck's first surviving coat of arms dates back to 1267 and shows the Inn bridge on the stone boxes used to secure it at the time.

Anbruggen grew rapidly, but the space between the Nordkette and the Inn was limited. In 1180, Berchtold V of Andechs therefore acquired a piece of land on the south side of the Inn from Wilten Monastery. This was the starting signal for Innsbruck. In the course of building the city wall, the Counts of Andechs had the Andechs Castle and moved their ancestral seat from Merano to Innsbruck. This settlement also grew rapidly and sometime between 1187 and 1204 the people of Innsbruck were able to enjoy city rights. The official date of foundation is often taken as 1239, when the last Count of Andechs, Otto VIII, confirmed the town charter in a document. At this time, Innsbruck was already the mint of the Andechs family and would probably have become the capital of their principality. But things turned out differently. Otto died in 1248 without descendants. The Counts of Tyrol took control of the Inn Valley and the city. They made Merano the first capital of the province of Tyrol.