The military significance of Häme Castle declined during the Middle Ages as it was no longer located on the borders of the Swedish kingdom. However, its administrative importance grew, especially as King Gustav Vasa focused on strengthening the kingdom's economy and governance.

In the 1500s, the castle was modernized. Lead-framed glass windows were installed, and the castle was heated with new tile stoves. The ceilings in the Knight’s Hall and King’s Hall were updated with stylish wooden beams.

Despite these improvements, the castle began to deteriorate. In 1599, a gunpowder explosion destroyed the upper parts of the South Tower and the Rooster Tower. Later, in 1659, a fire ravaged the castle, burning all the wooden structures. Though repairs were made, the castle's time as an important administrative center was coming to an end. By the early 1700s, the castle had lost much of its former glory.