The town is part of the historic Moravia region, located directly on the border with Lower Austria. In the south, a road border crossing leads to the neighbouring Austrian municipality of Drasenhofen. Mikulov is situated between the Pavlovské vrchy hilly area and the edge of the Mikulov Highlands, stretching up to the Thaya river and the three Nové Mlýny reservoirs. The Pálava Protected Landscape Area begins in Mikulov, and so does the Moravian Karst. After the Margraviate of Moravia was established, the settlement of Nikulsburch was first mentioned in a 1249 deed, issued by the Přemyslid margrave Ottokar II who granted the land of Mikulov, including a castle and the surrounding area, to the Austrian noble Henry I of Liechtenstein. In 1262 the possession was confirmed by Ottokar, Bohemian king since 1253. After King Rudolf I of Germany had defeated Ottokar at the 1278 Battle on the Marchfeld, he vested Henry II of Liechtenstein with market rights in villa Nicolspurch. German citizens were called in and lived there until their expulsion in 1945 according to the Beneš decrees.