The art began with Mitsuyo Maeda (later known as Count Koma), a Japanese expert judoka and member of the Kodokan. Jigoro Kano sent Maeda overseas to spread his Judo to the world. Eventually, Maeda emmigrated to Brazil in the 1910s where an influential businessman named Gastão Gracie helped him get established. In return for his aid, Maeda taught the fighting art to Gastão's son Carlos Gracie, who then taught the art to his brothers, including Hélio Gracie.

When Maeda taught the art to the Gracies he called it Jujitsu instead of Judo. It is not known why he chose the name Jujitsu because Maeda had only trained in Jujitsu for a very brief time as a child. There is much speculation and debate over this. One theory is that because Maeda was fighting in "no hold barred" type matches that Kano felt was against the principles of Judo, Maeda changed the name because of a falling out with Kano. Another theory is that Maeda included many "dirty" techniques in his teaching that had originated from classical jujitsu. At the time it was simply known as Jiu-Jitsu - not "Gracie Jiu-Jitsu" or "Brazilian Jiu-Jitsu." These latter terms came to be when the Gracies came to the United States to spread their art. "Jiu-Jitsu" was also the original spelling of the art in the West and that is why this style retains the original (although technically incorrect) spelling of the art. Other common spellings are Jujitsu, Jujutsu, Ju jitsu and Ju-Jitsu. The variety of spellings are due to the difficulty in translating Japanese Kanji into English words.
The Gracie brothers trained many of their sons, who carried on the family tradition. Hélio had the opportunity to teach a class one day while Carlos was absent. Through constant technical refinement in training and real fighting, emphasizing ground-work, Brazilian Jiu-Jitsu as it is known today was created. The Gracie family continued to develop the system throughout the 20th century, often fighting vale tudo matches (precursors to modern MMA), during which it gained its focus on ground fighting and refined its techniques.