Fabletown was founded when the Fables fled the Homelands to avoid The Adversary's conquering armies. It is heavily enchanted to avoid the notice of the Mundys.

When Mister Dark was released back in the Homelands, all of Fabletowns enchantments were broken causing their buildings to collapse. All of Fabletown's residents were forced to move to The Farm which was normally reserved for the Fables that couldn't pass for human.

While Mister Dark controlled the area where Fabletown used to be he called it Darkland and put such powerful enchantments on the area that no Mundys would notice its existence in the middle of New York City. Mister Dark used his witherlings to help him build a massive castle from the rubble of Fabletown. Following his demise, the Fables begin to carefully examine the building to see if it is safe enough for them to move into and reclaim as Fabletown.