SN1996cr is one of the five closest supernovae (SNe) to explode in the past 30 yr. Due to its fortuitous location in the Circinus galaxy at ∼3.7 Mpc, there is a wealth of recently acquired and serendipitous archival data available to piece together its evolution over the past decade, including a recent 485‐ks Chandra high‐energy transmission grating spectrum. In order to interpret these data, we have explored hydrodynamic simulations, followed by computations of simulated spectra and light curves under non‐equilibrium ionization conditions, and directly compared them to the observations. Our simulated spectra manage to fit both the X‐ray continuum and lines at four epochs satisfactorily, while our computed light curves are in good agreement with additional flux‐monitoring data sets. These calculations allow us to infer the nature and structure of the circumstellar medium (CSM), the evolution of the SN shock wave, and the abundances of the ejecta and surrounding medium. The data imply that SN 1996cr exploded in a low‐density medium before interacting with a dense shell of material about 0.03 pc away from the progenitor star. We speculate that the shell could be due to the interaction of a blue supergiant or Wolf–Rayet wind with a previously existing red supergiant (RSG) wind. The shock wave has now exited the shell and is expanding in the medium exterior to it, possibly the undisturbed continuation of the dense RSG wind. The narrow lines that earned SN 1996cr its IIn designation possibly arise from dense, shocked clumps in the CSM. Although the possibility for a luminous blue variable progenitor for this Type IIn SN cannot be completely excluded, it is inconsistent with much of the data. These calculations allow us to probe the stellar mass‐loss in the very last phases (<104 yr) of a massive star's life (>106 yr), and provide another means to deducing the progenitor of the SN.