'Atli' originates from Old Norse, specifically the word 'Atli', ultimately representing a Norse adaptation of Latin 'Attila' (from Hunnic), where 'atta' meant 'father' and the diminutive element '-ila' meant 'little'.

'Atli' changed from the Latin and Gothic recorded name 'Attila' and was adopted into Old Norse as 'Atli'; through medieval Norse literature and Icelandic saga traditions it remained as the personal name 'Atli'.

Initially, it was associated with the name 'Attila' meaning 'little father' (the historical Attila the Hun); over time it evolved into a Norse personal name and a literary/mythic character with that historical association largely lexicalized as a proper name.