In 1325, the Teutonic Knights built an Ordensburg castle called "Yladia" or "Ilaw", later known as "Preussisch Eylau", in the center of the Old Prussian region Natangia. 'Ylow' is the Old Prussian term for 'mud' or 'swamp'. The settlement nearby developed in 1336, but in 1348 the Teutonic Order gave the privilege to establish twelve pubs in the area around the castle. Although the settlement had only a few inhabitants, due to its central position it was often used as meeting place for officials of the Order. During the Thirteen Years' War, the castle was besieged on 24 May 1455 by troops of the Prussian Confederation under the command of Remschel von Krixen, but the garrison repulsed the attack. During the Horsemen's War in 1520, the castle was unsuccessfully besieged by troops of the Polish Kingdom, who devastated the settlement. Preußisch Eylau received its civic charter in 1585. In 1709–1711, the bubonic plague killed 2,212 inhabitants of the Eylau area. The Battle of Eylau during the Napoleonic Wars involved the French troops of Napoleon Bonaparte, the Russian troops of General Bennigsen, and the Prussian troops of General Anton Wilhelm von L'Estocq. Only 3 inhabitants of Eylau died in the battle, but 605 persons died due to hunger and diseases in 1807. Napoleon used the local courthouse as his headquarters in Eylau on 7–17 February 1807. On 1 April 1819, the town became the seat of the administrative district Preußisch Eylau. In 1834, a Teachers' Seminary was founded, educating every East Prussian teacher until it was closed down in 1924. The town was connected to the railway on 2 September 1866. The town was occupied without a struggle by Russian troops on 27 August 1914, but these troops left on 3 September 1914 after massacring 65 civilians. After 1933, large barracks were built by the Wehrmacht, and in 1935 Infantry and Artillery units were stationed there. On February 10, 1945, during the Soviet Red Army's East Prussian Offensive, the town was occupied by troops of the 55th Guards "Irkutsk-Pinsk" Division commanded by Major General Adam Turchinsky. The German population that had not already fled during the evacuation of East Prussia was subsequently expelled, with the last transport leaving on November 23, 1947. The NKVD established a prison camp for German civilians inside the former Wehrmacht barracks in 1945-1949. It held an estimated 13,000 inmates, of whom some 6,000 people died. In early August 1945, Polish officials took over the administrative power in the town, but left again on January 1, 1946, as the new borderline between the Soviet Union and Poland was set just at the southern outskirts of the town. The Polish administrative area south of the border was called "Powiat Ilawka" until 1958. In January 1946, the town became a part of the newly established Kaliningrad Oblast within the Russian SFSR and the town was given its present name, honoring General Pyotr Bagration, who was one of the senior Russian leaders in the Napoleonic Wars and is also the namesake of the 1944 Operation Bagration offensive.
Today the main border crossing point between Russia and Poland is south of the town. Since April 2007, government restrictions on visits to border areas have been tightened and travel to Sovetsk and Bagrationovsk is only allowed with special permission, unless in transit.
