Tourists are told that it was the place where Vlad the Impaler(Dracula), Prince of Wallachia, was held prisoner by John Hunyadi, Hungary's military leader and regent during the King's minority. Later, Vlad III entered a political alliance with John Hunyadi, although the latter was responsible for the execution of his father, Vlad II Dracul. Because of these links, the Hunedoara Castle is sometimes mentioned as a source of inspiration for Castle Dracula in Bram Stoker's 1897 horror novel Dracula. In fact, Stoker neither knew about Vlad's alliance with Hunyadi, nor about Hunyadi's castle. Instead, Stoker's own handwritten research notes confirm that the novelist imagined Castle Dracula to be situated on an empty top in the Transylvanian Călimani Mountains near the former border with Moldavia.

In the castle yard, near the 15th-century chapel, there is a well 30 meters deep. According to the legend, this fountain was dug by 3 Turkish prisoners to whom liberty was promised if they reached water. After 15 years they completed the well, but their captors did not keep their promise. It is said that the inscription on a wall of the well means "you have water, but not soul". Specialists, however, have translated the inscription as: "he who wrote this inscription is Hasan, who lives as slave of the giaours, in the fortress near the church".

Built in a Renaissance-Gothic style and constructed over the site of an older fortification on a rock above the smaller Zlaști River, the castle is a large and imposing structure with tall towers, bastions, an inner courtyard, diversely coloured roofs, and myriads of windows and balconies adorned with stone carvings. The castle also features a double wall for enhanced fortification and is flanked by both rectangular and circular towers, an architectural innovation for the period's Transylvanian architecture. Some of the towers (the Capistrano Tower, the Deserted Tower and the Drummers' Tower) were used as prisons. The Buzdugan Tower (a type of mace after which it was named) was solely built for defensive purposes and it had its exterior decorated with geometric motifs. The rectangular shaped towers have large openings to accommodate larger weapons.