The breed can be traced back to the late 17th century, to the northwestern corner of North America and specifically to the large area that covered what is now part of the states of Oregon, Washington, Idaho, and Montana. This was the land inhabited by the Nez Perce American Indians, and it is to their horsemanship and forward-thinking breeding practices that Appaloosa owes its success.

Although the Nez Percé developed this dappled breed, the history of dappled horses is long, with images of dappled horses appearing in prehistoric European cave paintings from around 17,000 BCE. in Europe and were in great demand from the 16th century to perform in the increasingly popular Riding Schools. Many of the sacred Spanish horses too, including the revered Andalusian, once exhibited spotted coat colours.

Horses introduced to the Americas by Spanish conquistadors carried the powerful gene for the spotted coat, which spread across North America as the Spanish continued their explorations. The Shoshone tribe of southern Idaho became a major horse trader, and it was largely from the Shoshone that the Nez Perce, whose territory lay further north and west, acquired their horse cattle. The Nez Percé land, with its fertile plains and protected areas, was well suited for raising horses, and the tribe quickly established significant breeding stock. Unlike many of the American Indian tribes, the Nez Perce set about implementing breeding programs specifically to improve their horses. Only the best horses were kept as studs, while those of inferior quality were frozen. The tribe kept the best of their breeding stock and disposed of the poorer horses by trading with other tribes. Their horse numbers increased rapidly, and the Nez Perce became a prosperous tribe based on their huge stock of horses. In the early 19th century, American explorer Meriwether Lewis (1774-1809) described Nez Percé horses as “of an excellent breed, elegantly built, active, and enduring.”

Color was an important consideration for the Nez Perce, not only for ornamental and decorative purposes, but also for camouflage. However, his main concern in breeding was to develop a well-rounded horse of great endurance, speed and toughness, and one that could survive on meager rations. His horses became famous for these qualities and were just as capable of pulling a plow as they were of covering great distances at high speed with a rider. The most prized horses were used during war campaigns and were fast, agile and intelligent, and the most revered were the spotted ones.

Spotted horses belonging to the Nez Perce were described as Palouse horses by white settlers, who took the name from the Palouse River that ran through Nez Perce territory. The horse later became known as the “Palouse” and then the Appalousey. The name Appaloosa was not given to the breed until 1938 with the formation of the Appaloosa Horse Club, established to preserve the breed. However, some fifty years before this, the intrepid spotted breed was nearly wiped out during the Nez Perce War fought between the American Indians and the US government in 1877. The Nez Perce managed to outwit and leave back the US Cavalry months and across 1,300 miles (2,092 km) of treacherous terrain, solely because of the strength and endurance of their Appaloosa horses. The Nez Perce were not defeated in the battle, but eventually surrendered to prevent further hardship for the people trying to weather the frigid Montana winter. The conditions of their surrender stated that they would be allowed to return to their lands in the spring with their horses, but instead they were sent to North Dakota and many of their beloved and prized animals slaughtered. Some escaped and others were then surrounded by props and used or sold.

Following this, some of the horses that had survived were quickly dispersed at auction and purchased by a few private individuals and ranchers who recognized their innate qualities and began breeding them. In 1937, Western Horseman magazine published an article on the Appaloosa written by Francis Haines, sparking public interest in the breed. The following year, Claude Thompson, a breeder of spotted horses, joined several others in establishing the Appaloosa Horse Club to preserve and promote the horses. By 1947, there were two hundred registered horses and one hundred members. Just three decades later, under the leadership of George Hatley, the club had a phenomenal number of over 300,000 registered horses, making it the third largest registry for light horse breeds. During this regeneration of the Appaloosa there was some introduction of Arabian blood and considerable Quarter Horse influence, which can be seen in the muscular build of the modern Appaloosa.

In 1994, the now Idaho-based Nez Percé tribe began a breeding program to develop the Nez Percé horse. The goal of this program, which is based on breeding old Appaloosa horses to Akhal Teke stallions, is to produce a graceful, hardy, versatile and agile horse that matches the original Nez Percé horses in qualities. Some, though not all, of these horses exhibit the spotted coat pattern of their Appaloosa heritage, though they generally stick to the sleeker, finer frame of the Akhal Teke. Today, Appaloosa is considered to be one of the most beautiful (reference) horse breeds in the world!