The word azulejo is derived from the Arabic word az-zulayj which means "little polished stone". This origin shows the unmistakable Arab influence in tiles. During the 12th century, tiles were cut in small pieces and assembled to create mosaics; they are known in Spain as alicatados. With on-going progress in using tin-glaze and new techniques, by the 12th century the city of Seville became the major centre of the Hispano-Moresque tile industry.

First azulejos tiles appeared in 15th century under influence of italian Renaissance and its specific ceramic style - maiolic (the same influence that formed the delft tiles in the Netherlands). Decorations moved from geometry to figuration with the representation of human characters, nature and landscapes.

The overall usage of hand painted decorative tiles in architecture both sacral and profane culminated in 17th-18th century in Portugal. Multicolor designs switched to mostly blue under the strong impression by chinese pocelain and the azulejos tiles became an essential part of the portuguese cultural heritage.