'babassu' originates from Portuguese, specifically the word 'babassu', which was borrowed from an indigenous Tupi–Guarani term for the palm.

'babassu' entered English from Portuguese in the 19th century via botanical and commercial descriptions of South American palms; the word was adopted into English largely unchanged.

Initially the term in indigenous languages referred to the palm and its nut; in English it has come to denote both the palm/nuts and the oil derived from them.