Onstwedde was first mentioned in 875 as Uneswido in documents of the Werden Abbey. The name means the forest (-wido similar to the English wood) of Une (first name). The village is a double esdorp, a communal pasture surrounded by houses. The northern pasture was called Wold, and the southern pasture Loug. Onstwedde was a part of Westerwolde, a region dominated by raised bogs which formed the natural border between Groningen, East Frisia and the Prince-Bishopric of Münster. Onstwedde is located in the valley of the river, and was a fertile island surrounded by bogs on all sides.
