From a sketch made by the city map drawer Scholeus from 1580, we can see that the church was built on a high spot above the town. Located like this it was an ideal lookout for fires. Scholeus’ sketch also shows that Nikolaikirken was a ruin already in 1580. This may have been caused by the Reformation in 1537, which put quite a number of Bergen’s many churches out of business.

Nikolaikirken is first mentioned during the civil wars in 1160 in connection with the fighting between Gregorious Dagsson and Erling Skakke. Other written sources also mention this church, particularly in connection with wars and fires. In Sverre’s Saga we find accounts of the big fire in 1198, when Nikolaikirken as well as four other churches, burned to the ground.
The church was significant as a lookout post for the Bergen’s watchmen. In King Magnus the Lawmender’s City Law from 1276 the following is mentioned about Nikolaikirken:

“Watch shall be held every night in Nikolaikirken’ s tower. It shall be kept by two able and reputable men appointed by the magistrate and the house owners. If he who is appointed does not wish to keep guard, he must pay a fine of two øre, and the City Magistrate must appoint another man. The District Governor shall appoint two men to check on the guards every night, and if they find the watchmen asleep, or not present at the watch post when the fire alarm rings, they shall be fined with one silver øre, or be thrown in jail.”

The City Law also maintained that when the City Council was in session, bells should ring in Nikolaikirken. During the council the bells should not ring for anything else than a fire alarm. Thus, in addition to being a house of worship, the church had an important practical function – to keep people safe from fire. The church was positioned high enough for the watchmen in the tower to have a good view over the whole town.

There is some doubt concerning who were parishioners to Nikolaikirken – Germans or Norwegians. In 1567, the renowned priest Absalon Pedersøn Beyer wrote that Nikolaikirken was a parish church for Norwegians when they lived around Bryggen, and that the church started to decay after the Hanseatic traders claimed this area for themselves.

Another possible reason for the church’s disappearance may be that the Reformation rendered many of Bergen’s churches redundant. Also, prior to the Reformation, the town had many more churches than needed by its population.