The 12th century brought an economic, scientific and social boom to Europe and is regarded as a kind of early medieval renaissance. Via the Crusades, there was an increased exchange with the cultures of the Middle East, which were more developed in many respects. Arab scholars brought translations of Greek thinkers such as Aristotle to Europe via southern Spain and Italy. Roman law was rediscovered at the first universities south of the Alps. New agricultural knowledge and a favourable climate, which was to last until the middle of the 14th century, made it possible for towns and larger settlements to emerge. One of these settlements was located to the north of Wilten Abbey between the River Inn and the Nordkette mountain range.

Politically and economically, the importance of the Inn Valley and the area north of it was mainly limited to transit. Tyrol had two low Alpine crossings, the Reschen Pass and the Brenner Pass, which were important for the imperial connection between the German lands in the north and the lands in Italy. In 1024, the Salian Conrad II, a rival of the Bavarian dukes from the House of Wittelsbach, was elected king. In order to bring these two Alpine crossings away from his Bavarian rivals and under the control of the Imperial Church, which was loyal to him, Conrad II granted the territory of Tyrol as a fief to the bishops of Brixen and Trento in 1027. The bishops in turn needed so-called bailiffs to administer these lands and administer justice.

These bailiffs of the Bishop of Brixen were the Counts of Andechs. The Andechs family may be overshadowed today by the Guelphs, Hohenstaufen, Wittelsbach and Habsburg dynasties, but they were an influential family in the High Middle Ages. They came from the area around Lake Ammer in Bavaria and owned estates in Upper Bavaria between the Lech and Isar rivers and east of Munich. Through skilful marriage politics, they had acquired the titles of Dukes of Merania, a region on the Dalmatian coast, and Margraves of Istria. They thus rose in rank within the Heiligen Römischen Reiches on. In the 12th century, they founded the Dießen monastery and the monastery on the holy mountain of Andechs above Lake Ammersee to ensure both administration and later salvation. In 1165, Otto V of Andechs came to the bishop's see in Brixen and gave the bailiwick over this high monastery to his brother. From then on, they administered the central part of the Inn Valley, the Wipp Valley, the Puster Valley and the Eisack Valley.

Today, Innsbruck stretches along both sides of the Inn. In the 12th century, this area was under the influence of two lords of the manor. South of the Inn, Wilten Abbey exercised lordship. The area north of the river was under the administration of the Andechs. While the southern urban area around the monastery had been used for agriculture for centuries, the alluvial area of the unregulated watercourse could not be cultivated before the High Middle Ages and was sparsely populated. The Inn Valley was densely forested and the banks of the wide Inn were swampy. Most of the people worked in agriculture, which was run by their landlord. They lived in poor huts made of mud and wood. There was hardly any medical care outside the towns, infant mortality was high and hardly anyone lived past the age of 50. Around the year 1133, the Andechs founded the market in what is now St Nicholas' Square Anbruggen and connected the northern and southern banks of the Inn via a bridge. The construction of the bridge turned the unusable agricultural land at the foot of the Nordkette mountain range into a trading centre. It greatly facilitated the movement of goods in the Eastern Alps. The Brenner route had become more interesting thanks to one of the innovations of the medieval Renaissance: new harnesses made it possible to negotiate the steep climbs with carts. The shorter Via Raetia had the Via Claudia Augusta over the Reschen Pass as the main transport route across the Alps. The customs revenue generated from trade between the German and Italian towns allowed the settlement to prosper. Blacksmiths, innkeepers, carriage operators, tailors, carpenters, rope makers, wagon makers and tanners settled in the small market. Horses, traders and carters had to be looked after and accommodated, and carts had to be repaired. The larger of these businesses employed clerks and farm labourers. The transformation from pure agriculture to a town began.

Anbruggen grew rapidly, but the space between the Nordkette and the Inn was limited. In 1180, Berchtold V of Andechs acquired a piece of land on the south side of the Inn from Wilten Monastery. This was the definitive starting signal for the genesis of Innsbruck. The abbot did not want to take his foot out of the door completely, as the new settlement developed splendidly thanks to the customs revenue. The document mentions three houses that were reserved for Wilten Abbey within the new settlement. In the course of building the town wall, the Counts of Andechs had the Andechs Castle and moved their ancestral seat from Merano to Innsbruck. Sometime between 1187 and 1204, the citizens of Innsbruck were granted city rights. The official date of foundation is often taken as 1239, when the last count of the Andechs dynasty, Otto VIII, formally confirmed the city charter in a document. Innsbruck was already the mint of the Andechs at this time and would probably have become the capital of their principality. But things turned out differently. In 1246, the Bavarian Wittelsbach dynasty, the Andechs' biggest rivals in southern Germany, destroyed their ancestral castle on Lake Ammersee. Otto, the last count of the House of Andechs-Merania, died without descendants in 1248. 12 years earlier, he had married Elisabeth, the daughter of Count Albert VIII of Tyrol. This noble family with its ancestral castle in Merano thus took over the fiefs and parts of the possessions, including the town on the Inn, as well as the arch-enemy with the Bavarian Wittelsbachs.