In 1717, Frederik IV decided that a canal should be dug to divert water from Arresø. Today, the canal flows gently though Frederiksværk, giving the town a particular charm.

The many well-preserved old buildings along the canal create a beautiful link between the past and the present.
A cannon factory was built there by French cannon maker, Peyrembert, that was later taken over by Counsellor Johan Frederik Classen.
Under his influence, the town flourished and soon a gunpowder factory, small enterprises and crafts companies were established in the town. In 1756, Frederik V issued a document, granting permission for the town to be called "Friederichswerk. Later Classen built a new cannon foundry, Gjethuset, which was used for heavy industry until 1976. Today,
Gjethuset is a culture house.