Lexicographer Jesse Sheidlower, the principal American editor of the Oxford English Dictionary, argues that the terms hipster and hippie derive from the word hip, whose origins are unknown. The word hip in the sense of "aware, in the know" is first attested in a 1902 cartoon by Tad Dorgan, and first appeared in prose in a 1904 novel by George Vere Hobart (1867–1926), Jim Hickey: A Story of the One-Night Stands, where an African-American character uses the slang phrase "Are you hip?"
The term hipster was coined by Harry Gibson in 1944. By the 1940s, the terms hip, hep and hepcat were popular in Harlem jazz slang, although hep eventually came to denote an inferior status to hip.
In Greenwich Village in the early 1960s, New York City, young counterculture advocates were named hips because they were considered "in the know" or "cool", as opposed to being square, meaning conventional and old-fashioned. In the April 27, 1961 issue of The Village Voice, "An open letter to JFK & Fidel Castro", Norman Mailer utilizes the term hippies, in questioning JFK's behavior. In a 1961 essay, Kenneth Rexroth used both the terms hipster and hippies to refer to young people participating in black American or Beatnik nightlife. According to Malcolm X's 1964 autobiography, the word hippie in 1940s Harlem had been used to describe a specific type of white man who "acted more Negro than Negroes". Andrew Loog Oldham refers to "all the Chicago hippies," seemingly in reference to black blues/R&B musicians, in his rear sleeve notes to the 1965 LP The Rolling Stones, Now!
The word hippie was also used in reference to Philadelphia in at least two popular songs in 1963: South Street by The Orlons, and You Can't Sit Down by The Dovells. In both songs, the term is applied to residents of Philadelphia's South Street.
Although the word hippies made other isolated appearances in print during the early 1960s, the first use of the term on the West Coast appeared in the article "A New Paradise for Beatniks" (in the San Francisco Examiner, issue of September 5, 1965) by San Francisco journalist Michael Fallon. In that article, Fallon wrote about the Blue Unicorn Cafe (coffeehouse) (located at 1927 Hayes Street in the Haight-Ashbury district of San Francisco), using the term hippie to refer to the new generation of beatniks who had moved from North Beach into the Haight-Ashbury district. New York Times editor and usage writer Theodore M. Bernstein said the paper changed the spelling from hippy to hippie to avoid the ambiguous description of clothing as hippy fashions.