The preface of the Norwegian Þiðriks saga af Bern says that it was written according to "tales of German men" and "old German poetry", possibly transmitted by Hanseatic merchants in Bergen. This somewhat formless compilation which is teeming of legendary heroes from various ages constituted the basis of the Swedish Didrikssagan from the mid-15th century. The Swedish reworking of the story is rather independent, many repetitions were avoided and the material is structured in a more accessible manner. The Swedish version is believed to have been composed on the orders of king Karl Knutsson who was interested in literature.
The oldest German trace of the Dietrich tradition is found in the 9th century Hildebrandslied, where there is a duel between Dietrich's foremost advisor and friend, Hiltibrant and Hadubrant, Hiltibrant's son. In the 12th century, it was rewritten and this was probably the time when a melody was added to it, a melody which is still extant. A second indication of long presence of the Dietrich tradition in Northern Germany, and which is probably of considerable age, is the ballad Koninc Ermenrîkes Dôt, which depicts a war expedition by Dietrich against the Frankish king Ermenrik. There were probably many lays and ballads on Dietrich since the author of the Scandinavian Þiðrekssaga claimed in the foreword of the saga that every Saxon child knew of Dietrich and his heroes.
In southern Germany, such lays and ballads were composed into larger units and notably into the Nibelunge-nôt (c. 1140), which survives in an edition from c. 1210, i.e. the Nibelungenlied and in which Siegfried, i.e. Sigurd Fafnisbane is in the centre of the story together with the destruction of his slayers the Nibelungs at the court of their brother-in-law Etzel, where Dietrich plays a central role.
There are also other poems in Old High German belonging to the Dietrich cycle, such as König Ruother, Walther und Hildegund (13th century), the lays about Ortnit and Wolfdietrich, on the dwarf Laurin, Der grosse Rosengarten, Die Rabenschlacht, Dietrichs Flucht, and so on.
The lays on Dietrich appear to have arrived in Scandinavia in the 12th century where, notably in Sweden and Denmark, they met faded legends on Sigurd and other Norse heroes. Both these traditions generated ballads among which a few ones are preserved, such as Vidrik Verlandsson's fight against Langben Riske and Sivard Snarensvend's joust with his friend the young Humlung. A Norwegian named Gustav Storm claimed that these lays are derived from the Swedish version Didrikssagan, a claim which was vividly opposed by Norwegian Sophus Bugge and Dane Nikolaj Frederik Severin Grundtvig.
In the mid-13th century, a Norwegian or an Icelander combined the "stories of German men" into a compilation, where he added Scandinavian traditions on Sigurd Fafnisbane and the Nibelungs (Gjúkungar), creating the Þiðrekssaga. In Germany a similar but less vivid and less complete compilation was created c. 1477 called the Heldenbuch.
Richard Wagner used it as a source for his opera Der Ring des Nibelungen.