Cashmere has been manufactured in Mongolia, Nepal and Kashmir for thousands of years. The fiber is also known as pashm (Persian for wool) or pashmina(Persian/Urdu word derived from Pashm) for its use in the handmade shawls of Kashmir. References to woolen shawls appear in texts surviving from between the 3rd century BC and the 11th century AD. However, a popular notion in Kashmir is that it was the 15th-century ruler of Kashmir, Zain-ul-Abidin, who founded the local wool industry by bringing weavers from Turkestan. Another local tradition sees the founder of all Kashmiri crafts in the famous 14th century saint Mir Sayyid Ali Hamadani who, tradition goes, brought 700 craftsmen from Persia to Kashmir.
Trading in commercial quantities of raw cashmere between Asia and Europe began with Valerie Audresset SA, Louviers, France, claiming to be the first European company to commercially spin cashmere. The down was imported from Tibet through Kazan, the capital of the Russian province of Volga, and was used in France to create imitation woven shawls. Unlike the Kashmir shawls, the French shawls had a different pattern on each side. The imported cashmere was spread out on large sieves and beaten with sticks to open the fibers and clear away the dirt. After opening, the cashmere was washed and children removed the coarse hair. The down was then carded and combed using the same methods used for worsted spinning.
In the 18th and early 19th centuries, kashmire (then called cashmere by the British) had a thriving industry producing shawls from goat down imported from Tibet and Tartary through Ladakh. The down trade was controlled by treaties signed as a result of previous wars. The Shawls were introduced into western Europe when the General in Chief of the French campaign in Egypt (1799-1802) sent one to Paris. The shawl's arrival is said to have created an immediate sensation and plans were put in place to start manufacturing the product in France.
In 1799 at his factory in Reims, William-Louis Ternaux, the leading woolens manufacturer in France under Napoleon, began to produce imitation India shawls (cachemires) using the wool of Spanish merino sheep. By 1811, with government assistance, Ternaux also began experimenting with the production of real India shawls using what he called laine de Perse, i.e., the down (duvet) of Tibetan-cashmere goats. In 1818, Ternaux resolved to help establish herds of cashmere goats in France. A famous expedition to Persia was organized, led by the orientalist and diplomat Pierre Amédée Jaubert, to be financed in part by the French government. Of the acquired herd of 1,500 animals, only 256 arrived safely in the spring of 1819 at Marseilles and Toulon via the Crimea. About 100 of the cashmere goats were then purchased by the French government (at 2,000 francs each) and sent to the royal sheep farm at Perpignan. The remainder, about 180 including new-borns, went to Ternaux's property at St. Ouen outside Paris. Although Ternaux had little success getting small farmers to add cashmeres to their sheep herds, a few wealthy landowners were willing to experiment with the goats. For example, Ternaux’s herd was seen in 1823 by C.T.Tower of Weald Hall, Essex, England. Tower purchased two female and two male goats and took them back to England, where in 1828 he was awarded a gold medal by the Society for the Encouragement of Arts, Manufactures and Commerce for rearing a herd of cashmeres. Also, a few of Ternaux's goats were purchased for a model farm at Grignon, near Versailles, run by M. Polonceau. Polonceau crossbred the cashmeres with Angora goats to improve the down for spinning and weaving. This Cashmere-Angora herd was seen by William Riley of New South Wales in 1828, and again in 1831 when Riley purchased thirteen of the goats for trans-shipment to Australia. At the time, the average production of the Polonceau herd was 16 ounces (500 grams) of down. Ternaux's herd at St. Ouen still numbered 150 when the famous industrialist died in 1833. The herd at Perpignan died out by 1829.
By 1830, weaving cashmere shawls with French-produced yarn had become an important Scottish industry. The Scottish Board of Trustees for the Encouragement of Arts and Manufactures offered a 300 pound sterling reward to the first person who could spin cashmere in Scotland based on the French system. Captain Charles Stuart Cochrane collected the required information while in Paris and received a Scottish patent for the process in 1831. In the autumn of 1831, he sold the patent to Henry Houldsworth and sons of Glasgow. In 1832 Henry Houldsworth and sons commenced the manufacture of yarn, and in 1833 received the reward.
Dawson International claim to have invented the first commercial dehairing machine in 1890, and from 1906 they purchased cashmere from China, but were restricted to purchasing fiber from Beijing and Tianjin until 1978. In 1978 trade was liberalised and Dawson International began buying cashmere from many provinces.
Many early textile centers developed as part of the American Industrial Revolution. Among them, the Blackstone Valleybecame a major contributor to the American Industrial Revolution. The town of Uxbridge, Massachusetts became an early textile center in the Blackstone Valley, which was known for the manufacture of cashmere wool and satinets.
Austrian Textile Manufacturer Bernhard Altmann is credited with bringing cashmere to the United States of America on a mass scale beginning in 1947.