The earliest variant of the name that became Tennessee was recorded by Captain Juan Pardo, the Spanish explorer, when he and his men passed through a Native American village named "Tanasqui" in 1567 while travelling inland from South Carolina. European settlers later encountered a Cherokee town named Tanasi (or "Tanase") in present-day Monroe County, Tennessee. The town was located on a river of the same name (now known as the Little Tennessee River). It is not known whether this was the same town as the one encountered by Juan Pardo.

The meaning and origin of the word are uncertain. Some accounts suggest it is a Cherokee modification of an earlier Yuchi word. It has been said to mean "meeting place", "winding river", or "river of the great bend".

The modern spelling, Tennessee, is attributed to James Glen, the Governor of South Carolina, who used this spelling in his official correspondence during the 1750s. In 1788, North Carolina named the third county to be established in what is now Middle Tennessee "Tennessee County". When a constitutional convention met in 1796 to organize a new state out of the Southwest Territory, it adopted "Tennessee" as the name of the state.