The bishops of Lincoln were among the magnates of medieval England: the diocese of Lincoln, the largest in England, had more monasteries than the rest of England put together, and the diocese was supported by large estates.  The administrative centre was the Bishop’s Palace, the third element in the central complex. When it was built in the late 12th century, the Bishop’s Palace was one of the most important buildings in England.  By 1150, Lincoln was among the wealthiest towns in England. The basis of the economy was cloth and wool, exported to Flanders; Lincoln weavers had set up a guild in 1130 to produce Lincoln Cloth, especially the fine dyed ‘scarlet’ and ‘green’.

During the 13th century, Lincoln was the third largest city in England and was a favourite of more than one king. During the First Barons' War, it became caught up in the strife between the king and the rebel barons, who had allied with the French. It was here and at Dover that the French and Rebel army was defeated. In the aftermath of the battle, the town was pillaged for having sided with Prince Louis.However, during the 14th century, the city's fortunes began to decline. The lower city was prone to flooding, becoming increasingly isolated, and plagues were common.