'appaloosa' ultimately derives from the place name 'Palouse' (a region and river in the northwestern United States); the breed name likely developed in English from references to horses of that region (compare 'a Palouse'). The place name 'Palouse' itself likely comes from French 'pelouse' meaning 'turf' or 'grassy place'.

'appaloosa' appears to have arisen in English in the 19th century from phrases referring to horses of the Palouse region (e.g. 'a Palouse' or 'Palouse horse'), which then evolved into the fixed breed name 'Appaloosa'.

Originally it referred to horses associated with the Palouse region or its people; over time it came to denote a distinct breed characterized especially by spotted coat patterns.