Oelwein is a city in Fayette County, Iowa, United States. The population was 5,920 at the time of the 2020 census, a decrease of 11.5% from …Oelwein is a city in Fayette County, Iowa, United States. The population was 5,920 at the time of the 2020 census, a decrease of 11.5% from the 2000 census. The largest community in Fayette County, it is located at the junction of State Highways 3 and 150.