Brandenburg-Schwedt was a secundogeniture of the Hohenzollern margraves of Brandenburg, established by Prince Philip William who took his residence at Schwedt Castle in 1689. By appanage, they administered the manors of Schwedt and Vierraden on the Oder river (Uckermark and Neumark) as well as Wildenbruch in Pomerania (present-day Swobnica, Poland). Though prosperous, the cadet branch never obtained Imperial immediacy.
Because of a lack of money in the late days of the disastrous Thirty Years' War (1618–1648), the "Great Elector Frederick William of Brandenburg about 1640 mortgaged the Schwedt region to the Baltic German noble Gustav Adolf von (Varrensback, Varensbeke) for the sum 25,000 Thalers. His second wife, Electress Sophia Dorothea, daughter of Duke Philip of Schleswig-Holstein-Sonderburg-Glücksburg, personally re-acquired the territory for 26,500 Thalers shortly after the birth of her first son Prince Philipp William (1669–1711).
Dorothea dedicated herself to the reconstruction of the Renaissance castle at Schwedt, which had been devastated in the Thirty Years' War, as well as to the economic development of the town and its surroundings. Dutch experts and French Huguenots were invited to cultivate tobacco in the Spring of 1686. By the end of the 18th century, the Uckermark, with an area of 44 km², was the largest coherent tobacco-producing region in the Holy Roman Empire. Its three cigar factories were the most important economic driving forces in the region.