The name "Munkeby" in Norwegian means Place of the Monks. Possibly, like Hovedøya Abbey and Lyse Abbey, Munkeby's foundation was carried out by English monks. In 1207, Tautra Abbey was founded, and, either then or at some later point in the 13th century the community and assets of Munkeby were transferred to the new foundation, of which Munkeby then became a grange.
An attempt to re-establish it as an independent house in the 1470s failed. The church however continued in use as a parish church until 1587. There are substantial remains of the simple church, built of stone, although it was used as a quarry, but the monastic buildings, built of wood, apparently succumbed to fire in 1567.
In 2007, the now-Trappist Abbey of Cîteaux in France decided to establish a new Cistercian monastery at Munkeby, the first new foundation directly from the very first house of the Order in 500 years. A monastery was built and four monks took residence there in 2009. The new monastery is situated about 1.5 kilometres (0.93 mi) from the medieval ruins.