There are different claims to the origins of the ugg boot style. Artisanal sheepskin boots were known in rural Australia during the 1920s, and were reportedly worn by shearers as they found them resistant to wool yolk, which would rot their ordinary boots. However, the date of commercial manufacturing began remains unclear. The boots were reportedly being manufactured in 1933 by Blue Mountains Ugg Boots of New South Wales. Frank Mortel of Mortels Sheepskin Factory has stated that he began manufacturing the boots in the late 1950s. Surfer Shane Stedman of Australia has stated in interviews that he invented the ugg boot. Perth sheepskin boot manufacturers Bruce and Bronwyn McDougall of Uggs-N-Rugs have manufactured the boots since the late 1970s.
The origin of the term "ugg" is also unclear. Stedman registered the trademark "UGH-BOOTS" in Australia in 1971, and in 1982 registered the "UGH" trademark. Frank Mortel claims that he named his company's sheepskin boots "ugg boots" in 1958 after his wife commented that the first pair he made were "ugly." Some accounts have suggested that the term grew out of earlier variations, such as the "fug boots" worn by United Kingdom Royal Air Force pilots during World War I.
The 1970s saw the emergence of advertising using the UGG and UGH terms both in trade names and as a generic term in Australia. The Macquarie Dictionary of the Australian language first included a definition for "ugg boot" as a generic term for sheepskin boots in its 1981 edition. (After Stedman complained to the editors of Macquarie, a trademark notation was added to subsequent editions indicating that "UGH" was a trade mark).
In the 1970s, ugg boots became popular among competitive surfers. After movie theatres in Sydney banned ugg boots and ripped jeans, the footwear became somewhat popular in the youth market as a sign of rebellion. Sheepskin footwear accounts for around 10 percent of footwear production in Australia.