Throughout history, the hula hoop has been used in various cultures for a number of purposes. In ancient Greece, citizens used the hula hoop as a form of exercise. In Egypt around 3,000 years ago, hoops made out of grape vines were propelled around the ground with sticks. Native Americans used hoops as a target for teaching accuracy for hunting. The word "hula" was added in the early 18th century as sailors who visited Hawaii noticed the similarity between hula dancing and tripping hoops.

Plastic hula hoops were first manufactured and sold in Australia. In 1957, Coles department store sold bamboo hoops, but the supplier couldn't produce enough to meet demand. So they invited Alex Tolmer, the founder of Toltoys, to produce plastic ones. Toltoys sold 400,000 plastic hoops in 1957.

In 1958, Melin and Knerr of Wham-O started to market hula hoops in the USA, selling 100 million over that summer. The craze lasted from January to October, then suddenly died. In only four months, an estimated 80 to 100 million of them were sold in 1958. Hula Hoops became famous all over the world.

In Indonesia, playing with a hoop in public was banned because in that culture it was not socially acceptable to shake one's hips in public. Later in 1965, WHAM-O developed hoops with several ball bearings trapped inside of the ring.

In 1957 the hula (also frequently spelled "hoola") hoop was reinvented by Richard Knerr and Arthur "Spud" Melin, founders of the Wham-O toy company. (The two had founded the company in a Los Angeles garage in 1948 to market the "Wham-O" slingshot, which was originally invented to shoot pieces of meat into the air, as a training device for falcons).

The idea came from an Australian who had visited California who told Knerr and Melin about children twirling bamboo hoops around the waist in gym class. The new Hula Hoops were made possible by Marlex, a recently invented durable plastic.

Knerr and Medlin were unable to patent their vastly profitable "re-invention", as it had been in use for thousands of years; making the device out of a new material did not meet patent requirements of originality. They were largely able, however, to protect their invention by trademarking "Hula hoop".

After the hoop was released in 1958,Wham-O sold 25 million in the first four months and over 100 million in its first year. As the fad ran its course, Wham-O again struck lucky with the release of their Frisbee.

To relaunch the Hula Hoop in the late 1960s, Wham-O staged a national competition in the US in conjunction with the National Parks & Recreation Network. The National Hula Hoop Contest (subsequently re-named the World Hula Hoop Championships) grew in scope from 500 U. S. cities in 1968 to over 2,000 cities in 1980, with two million participants.

Competitors were judged on their performance of compulsory maneuvers (Knee Knocker, Stork, Hula Hop, Wrap the Mummy, Alley Oop) as well as freestyle routines set to music, establishing the roots of the contemporary freestyle Hula Hoop movement.