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The abbey was founded in 1293 by Bernhard of Prambach, Bishop of Passau, as a Cistercian monastery. It was settled in 1295 by monks from Wilhering Abbey, its mother house, and was of the filiation of Morimond Abbey. It suffered a considerable decline, both spiritual and financial, in the period of the Protestant Reformation, and for a time passed into private ownership. From 1618 onwards the intervention and support of Wilhering Abbey gradually restored it.
On Easter Sunday 1699, a disastrous fire plunged the abbey once again into financial difficulties and from 1720 its management was in the hands of administrators. In 1746, Leopold Reichl, the last and greatest of Engelszell's abbots of the Common Observance, was appointed, and soon rebuilt its finances. Between 1754 and 1764, Leopold rebuilt the present-day abbey church.
In 1786, Engelszell was dissolved by Emperor Joseph II and the buildings were subsequently put to several secular uses, including as a factory and as a residence.