It became an Internet meme in the mid-2000s after a sped-up version of the song was attached to a video loop from the Japanese visual novel Popotan, which went viral.

The meme started as a fifteen frame Flash animation loop showing Mai and Mii, characters of the Japanese visual novel Popotan, doing a hip swing dance with their hands over their heads to imitate rabbit ears, and the chorus of a sped up version of the song.

According to an interview with Ruakuu, Speedycake said the speed-up came from a mixing mistake while transitioning the "Caramelldansen" song to a faster BPM, and it ended up being "squeaky and high pitched", but that people were requesting for it anyway.

Caramell's Juha "Millboy" Myllylä, responding to questions from Japanese show Netstar NHK, said that he first learned of the dance on YouTube.

The idea of the new Swedish concept came from YouTube, showing more than 16,000 different versions of the original Flash animation, including small loops, complete song shorts and live action videos.

The lyric: "Dansa med oss, klappa era händer" ("Dance with us, clap your hands") was sometimes misinterpreted as "バルサミコ酢やっぱいらへんで" ("barusamiko-su yappa irahen de"), which translates to "I don't want any balsamic vinegar after all", and ended up being a popular soramimi or mondegreen for the song, even affecting the Japanese language version.

They first showed up in the Japanese release "U-u-uma uma" single on 21 May 2008 as two anime character counterparts for the two female vocalists Malin Sundström and Katia Löfgren, removing the rest of the band members.

[33] Entertainment group LoadingReadyRun performs the dance for their Desert Bus for Hope charity fundraisers most years, sometimes multiple times during a single run.

[34] In August 2010, the characters in the American Disney Channel program Phineas and Ferb perform the dance in the episode "Summer Belongs to You" when they stop by Tokyo.

[38] In a TV commercial for Gamania's Lucent Heart video game, the couple do the dance with the song playing in the background.

[32] In the World of Warcraft "Mists of Pandaria" expansion pack, the choreography for the female Pandaren dance emote is derived from this meme.