Castelnuovo di Garfagnana emerged in the provincial area as the main location for the free internment of foreign Jews in the period 1941-1943. About 70 people, placed in private homes or hotels, without the possibility of leaving the town, going out at night and with the obligation to sign with the local public security authority on predetermined days.

After 8 September 1943, the area was occupied by the Germans and fascist authority was restored. The Nazi occupation was characterised by the issuing of a series of ordinances, the transformation of production activities for the purposes of war and the development of voluntary or forced labour under the Todt organisation, which was involved in the building of fortifications, trenches and roads along the Gothic Line. In December 1943, the foreign Jewish families interned here were transferred to the concentration camp in Bagni di Lucca, with few exceptions. From there they were moved first to Florence, then to Milan, and finally deported to Auschwitz. Only Lotte Wallach and Leo Venderber, a young synagogue officiant, were saved from the Shoah.

In August 1944, during the German retreat towards the Gothic Line and the advance of the front, the 36th Black Brigade 'Mussolini' stationed in several villages in the Garfagnana, including Castelnuovo at the Capuchin monastery. There they were attacked by a group of partisans from the Garibaldi Lunense Division. A fierce roundup followed on 23 September 1944, resulting in the killing of 7 civilians and 1 partisan at the hands of the fascists. On 6 November 1944, German soldiers shot four more civilians at the cemetery in Castelnuovo Garfagnana.

The area from the second half of 1944 was characterised by intense Allied bombardment and violent fighting along the Gothic positions. The first Allied air raid, on 2 July 1944, resulted in the death of six civilians. The population was displaced over the months. The remained people lived in extremely precarious conditions. On 13 February 1945, an Allied fighter-bomber hit a makeshift air raid shelter near the cemetery, killing 30 people. Castelnuovo di Garfagnana was liberated on 20 April 1945 by partisans followed by the immediate arrival of Anglo-American troops. At the end of the war, 70 air raids and the destruction of 80% of the buildings were recorded.

Castelnuovo was awarded the Gold Medal of Civil Merit on 13 October 2009, together with 16 municipalities in Garfagnana, for the roundups, reprisals, and bombings suffered near the Gothic Line by the population, which was able to face these events thanks to the solidarity and courage in the ideal of freedom.