Built around 1225 by William and Matilda de Marisco as the administrative centre of the medieval cantred of Okonagh, this Anglo-Norman stronghold was a wedding gift from the Archbishop of Dublin when William married Matilda. The castle's strategic position controlled both a medieval road and a river crossing point, with the nearby Castletown church just 200 metres to the east. Interestingly, archaeologist O'Keeffe has identified a curving break in the southern slope that may mark an earlier earth and timber castle enclosure, possibly constructed by William de Braose before the stone fortress was erected.

The castle changed hands frequently throughout its history, becoming a royal possession of Henry III in 1251, who placed it under Walter Maunsell's custody. By 1281, King Edward I had granted the entire cantred, including the castle, to Otho de Grandison. Eventually, the fortress passed to the O'Brien family, who held it for generations; in 1640, Mortagh Mac Bryne was recorded as possessing both the castle and its mill. The structure even served as a Cromwellian garrison between 1651 and 1654, with detailed accounts showing payment for hay for the horses stationed there.

What remains today is a spectacular Norman keep dating to around 1200, with its eastern end still towering over 20 metres high despite the western wall having collapsed entirely. The keep originally measured 18.6 metres long by 13.4 metres wide, built with walls 2.1 metres thick above a distinctive base batter. The main hall featured a fireplace on the north wall and a round-headed window with embrasure seats on the south. A sophisticated design incorporated a spiral staircase within a projecting turret, leading to a gallery with corner rooms and even a latrine projecting from the north wall. The construction details, including clear impressions of wooden planks used as centring for the vaults, reveal that these complex features were all part of the original design rather than later additions, making Coonagh Castle a remarkable example of early medieval military architecture in Ireland.