To the north, Reuss had been part of Thuringia since 1920; it became part of the Soviet occupation zone in 1945, splitting the village between what became West Germany and East Germany. A pass was required to cross between the two parts of town. A series of border fences were constructed after 1952, with residents close to the border forced to relocate. The wall separating the two halves of Mödlareuth was built in 1966, with the East German part of the village strictly monitored and subject to access restrictions. Americans nicknamed the town "Little Berlin"; US Vice President George HW Bush and West German defence minister Manfred Wörner visited in 1983, with Bush exclaiming "Ich bin ein Mödlareuther!" in allusion to John F. Kennedy's "Ich bin ein Berliner."
The crossing was re-opened to pedestrian traffic in December 1989 and most of the wall was bulldozed in June 1990, with a portion retained as a memorial. An open-air museum, established in 1994, includes a portion of the original wall as well as a rebuilt barrier typical of those on the border at the time.