In the 16th century, the town fell into decline after abandonment of the castle following the death of Cicely Neville, Duchess of York in 1495, and the rise of the nearby town of Hemel Hempstead (which was granted a Charter of Incorporation by Henry VIII on 29 December 1539).
The population of the town in 1563 has been estimated at only 545.
In 1580, the castle ruins and the park were leased by Elizabeth I to Sir Edward Carey, for the nominal rent of one red rose each year.
Stone from the castle was used to build Berkhamsted Place, a local school, and other buildings in the late 16th century.
Brewing and maltings was noted as one of the town’s principal industries in the reign of Elizabeth.
Around 1583, a new market house was erected west of St Peter's Church at the end of Middle Row (alternatively named Le Shopperowe or Graball Row).
The market house was destroyed in a fire in 1854.

In 1612, Berkhamsted Place was bought by Henry Frederick, Prince of Wales for £4,000.
Henry died later that year, and bequeathed the house to his brother Charles (later King Charles I), who leased the property to his tutor, Thomas Murray, and his wife, Mary Murray, who had been his nurse and Lady of the Privy Chamber to the prince's mother.
John Norden wrote in 1616 that the making of malt was then the principal trade of the town.
In 1618, James I reaffirmed Berkhamsted's borough status with a charter.
Following surveys in 1607 and 1612 the Duchy of Cornwall enclosed 300 acres (121 ha) from the Common (now known as Coldharbour farm) despite local opposition led by Rev Thomas Newman.
In 1639 the Duchy tried to enclose a further 400 acres (162 ha) of the Berkhamsted and Northchurch Commons, but was prevented from doing so by William Edlyn of Norcott.
The castle's park, which had reached 1,252 acres (507 ha) by 1627, was broken up over the next two decades, shrinking to only 376 acres (152 ha), to the benefit of local farmers.
In 1643, Berkhamsted was visited by a violent pestilential fever.

Born in Berkhamsted, Colonel Daniel Axtell (1622 – 19 October 1660), a Baptist and a grocer's apprentice, played a zealous and prominent part in the English Civil War, both in England and in the Cromwellian conquest of Ireland.
He participated as a lieutenant colonel in Pride's Purge of the Long Parliament (December 1648), arguably the only military coup d'état in English history, and commanded the Parliamentary Guard at the trial of King Charles I at Westminster Hall in 1649.
During Cromwell's Protectorate, he appropriated Berkhamsted Place.
Shortly after the Restoration of the monarchy under Charles II, the unrepentant Axtell was hanged, drawn and quartered as a regicide.
After the Restoration, the town lost its charter granted by James I and its borough status.
The surveyor of Hertfordshire recommended that a new tenant and army officers were needed at Berkhamsted Place "to govern the people much seduced of late by new doctrine preacht unto them by Axtell and his colleagues."
The population of the town in 1640 and in the 1690s was estimated at 1075 and 767, respectively.
The town was a centre of religious nonconformity from the 17th century: over a quarter of the town were Dissenters in the second half of the century, and in 1700, there were 400 Baptists recorded as living in Berkhamsted.
Three more shops are mentioned in the row next to the church, and the Parliamentary Survey of 1653 suggests that the area near the Market House was used for butchery.
In the 16th century, the town fell into decline after abandonment of the castle following the death of Cicely Neville, Duchess of York in 1495, and the rise of the nearby town of Hemel Hempstead (which was granted a Charter of Incorporation by Henry VIII on 29 December 1539). The population of the town in 1563 has been estimated at only 545. In 1580, the castle ruins and the park were leased by Elizabeth I to Sir Edward Carey, for the nominal rent of one red rose each year. Stone from the castle was used to build Berkhamsted Place, a local school, and other buildings in the late 16th century. Brewing and maltings was noted as one of the town’s principal industries in the reign of Elizabeth. Around 1583, a new market house was erected west of St Peter's Church at the end of Middle Row (alternatively named Le Shopperowe or Graball Row). The market house was destroyed in a fire in 1854.
In 1612, Berkhamsted Place was bought by Henry Frederick, Prince of Wales for £4,000. Henry died later that year, and bequeathed the house to his brother Charles (later King Charles I), who leased the property to his tutor, Thomas Murray, and his wife, Mary Murray, who had been his nurse and Lady of the Privy Chamber to the prince's mother. John Norden wrote in 1616 that the making of malt was then the principal trade of the town. In 1618, James I reaffirmed Berkhamsted's borough status with a charter. Following surveys in 1607 and 1612 the Duchy of Cornwall enclosed 300 acres (121 ha) from the Common (now known as Coldharbour farm) despite local opposition led by Rev Thomas Newman. In 1639 the Duchy tried to enclose a further 400 acres (162 ha) of the Berkhamsted and Northchurch Commons, but was prevented from doing so by William Edlyn of Norcott. The castle's park, which had reached 1,252 acres (507 ha) by 1627, was broken up over the next two decades, shrinking to only 376 acres (152 ha), to the benefit of local farmers. In 1643, Berkhamsted was visited by a violent pestilential fever.
Born in Berkhamsted, Colonel Daniel Axtell (1622 – 19 October 1660), a Baptist and a grocer's apprentice, played a zealous and prominent part in the English Civil War, both in England and in the Cromwellian conquest of Ireland. He participated as a lieutenant colonel in Pride's Purge of the Long Parliament (December 1648), arguably the only military coup d'état in English history, and commanded the Parliamentary Guard at the trial of King Charles I at Westminster Hall in 1649. During Cromwell's Protectorate, he appropriated Berkhamsted Place. Shortly after the Restoration of the monarchy under Charles II, the unrepentant Axtell was hanged, drawn and quartered as a regicide. After the Restoration, the town lost its charter granted by James I and its borough status. The surveyor of Hertfordshire recommended that a new tenant and army officers were needed at Berkhamsted Place "to govern the people much seduced of late by new doctrine preacht unto them by Axtell and his colleagues." The population of the town in 1640 and in the 1690s was estimated at 1075 and 767, respectively. The town was a centre of religious nonconformity from the 17th century: over a quarter of the town were Dissenters in the second half of the century, and in 1700, there were 400 Baptists recorded as living in Berkhamsted. Three more shops are mentioned in the row next to the church, and the Parliamentary Survey of 1653 suggests that the area near the Market House was used for butchery.
Berkhamsted