Vienna has become an important center of German civilization in central Europe by the middle of the twelfth century, and the four existing churches, including only one parish church, no longer meet the town's religious needs.

In 1137, Bishop of Passau Reginmar and Margrave Leopold IV had signed the Treaty of Mautern, which referred to Vienna as a civitas for the first time and transferred the St. Peter's Church to the Diocese of Passau.

Under the treaty, Margrave Leopold IV also received from the bishop extended stretches of land beyond the city walls, with the notable exception of the territory allocated for the new parish church, which will eventually become St. Stephen's Cathedral.

Founded in 1137 following the Treaty of Mautern, the partially constructed Romanesque church is solemnly dedicated in 1147 to Saint Stephen in the presence of Conrad III of Germany, Bishop Otto of Freising, and other German nobles who are about to embark on the Second Crusade.