For centuries the woollen cloth, that would eventually become known as Harris Tweed, has been woven by hand in the Western Isles of Scotland. Originally this handmade fabric was woven by crofters for familial use, ideal for protection against the colder climate in the North of Scotland. Surplus cloth was often traded or used as barter, eventually becoming a form of currency amongst the islanders. For example, it was not unusual for rents to be paid in blankets or lengths of cloth.

By the end of the 18th Century, the spinning of wool yarn from local raw materials was a staple industry for the crofters of the Outer Hebrides. Finished handmade cloth was exported to the Scottish mainland and traded along with other commodities produced by the Islanders, such as dry hides, goat and deer skins.

In about 1830 a London merchant received a letter from a Hawick firm, in the Scottish Borders, referring to 'tweels'; a pattern in which fabric is woven. It is believed that the word was erroneously read as 'tweed' in reference to the river Tweed that winds its way through the border towns. The cloth was advertised as 'Tweed' and the name became synonymous with the fabric.