In 1938, architect Alfred Mosher Butts created the game as a variation on an earlier word game he invented called Lexiko. The two games had the same set of letter tiles, whose distributions and point values Butts worked out meticulously performing a frequency analysis of letters from various sources including The New York Times.

The new game, which he called "Criss-Crosswords," added the 15-by-15 game board and the crossword-style game play. He manufactured a few sets himself, but was not successful in selling the game to any major game manufacturers of the day.

In 1948, James Brunot, a resident of Newtown, Connecticut, (and one of the few owners of the original Criss-Crosswords game) bought the rights to manufacture the game in exchange for granting Butts a royalty on every unit sold.

Though he left most of the game (including the distribution of letters) unchanged, Brunot slightly rearranged the "premium" squares of the board and simplified the rules; he also changed the name of the game to "Scrabble," a real word which means "to scratch frantically."

In 1949, Brunot and his family made sets in a converted former schoolhouse in Dodgington, a section of Newtown. They made 2,400 sets that year, but lost money. According to legend, Scrabble's big break came in 1952 when Jack Strauss, president of Macy's, played the game on vacation.

Upon returning from vacation, he was surprised to find that his store did not carry the game. He placed a large order and within a year, "everyone had to have one." In 1952, unable to meet demand himself, Brunot sold manufacturing rights to Long Island-based Selchow and Righter (one of the manufacturers who, like Parker Brothers and Milton Bradley Company, had previously rejected the game).

Selchow & Righter bought the trademark to the game in 1972. J. W. Spear & Sons began selling the game in Australia and the UK on January 19, 1955. They are now a subsidiary of Mattel, Inc. In 1986, Selchow and Righter sold the game to Coleco, who soon after went bankrupt. The company's assets, including Scrabble and Parchesi were purchased by Hasbro.

In 1984, Scrabble was turned into a daytime game show on NBC. Scrabble ran from July 1984 to March 1990, with a second run from January to June 1993.