The sheepskin boot was designed by an Australian surfer, Shane Stedman: his idea was born from the need to keep your feet warm after surfing in cold Australian waters. In 1971 Stedman registered the UGH-BOOTS trademark in Australia and in 1982 the UGH trademark.

In 1978 it was another Australian surfer, Brian Smith, who started the UGG Australia footwear company in the United States: UGG's footwear met the public's favor among Californian surfers and Hollywood stars.

In 1995 the US company Deckers Outdoor Corp. bought the company founded by Smith, UGG Holdings, Inc., for 15 million dollars. In 1996 Shane Stedman sold his rights to the Australian UGG brands to Deckers: the consideration was £ 10,000, with an additional commitment from the company to provide him with three pairs of UGG boots a year for life.

Since the early 2000s, UGG boots have become a fashion product and a cultural phenomenon.