'strait-laced' is formed in English from 'strait' and the past participle 'laced' (from 'lace'). 'Strait' ultimately comes via Old French 'estreit' from Latin 'strictus' meaning 'drawn tight' or 'tight', while 'lace' derives from Old French and ultimately Late Latin 'laqueus' meaning 'noose' or 'snare'.

The compound reflects an evolution from literal senses ('laced tightly' or 'tight-laced', often about garments) to a figurative adjective. The phrase 'tight-laced' existed earlier in reference to corsets; by the 19th century 'strait-laced' (using 'strait' in the sense of 'tight' or 'severe') came to be used figuratively for moral strictness and propriety.

Originally it could describe being 'laced tightly' (literal, about clothing); over time the image of being tightly constrained shifted to mean 'rigidly proper or morally strict' and that figurative sense is now dominant.