In the early 14th century, the area immediately north of Monmouth, known as Archenfield, became known for the high quality of its wool, produced from Ryeland sheep.

The wool was ideal for the production of high quality felt, and the location of Monmouth, on the River Wye some 18 miles (29 km) inland from the Severn estuary, allowed the produce of the area ready access to wider markets.

The industry of cap manufacture by hand knitters in and around Monmouth was well established by the 15th century, when court records show Capper as a common surname in the town.

1. c. 19), during the reign of Elizabeth I, stated that every person above the age of six years (excepting "Maids, ladies, gentlewomen, noble personages, and every Lord, knight and gentleman of twenty marks land") residing in any of the cities, towns, villages or hamlets of England, must wear, on Sundays and holidays (except when travelling), "a cap of wool, thicked and dressed in England, made within this realm, and only dressed and finished by some of the trade of cappers, upon pain to forfeit for every day of not wearing 3s.

The earliest surviving reference to a "Monmouth Cappe" dates from 1576, in a letter from Lord Gilbert Talbot of Goodrich Castle to his father, the Earl of Shrewsbury, accompanying a new year's gift of a cap.

In the 1620s, the sponsors of the Massachusetts Bay Colony ordered Monmouth caps - described as "thick, warm, fulled by hand- and foot- beating and much favored by seamen" - as part of the outfitting of the settlers.

[1] Daniel Defoe, in his 1712 Tour through the Whole Island of Great Britain, described Monmouth caps as being worn predominantly by Dutch seamen.

Peter the Great of Russia wore one when working for the East India Company in 1697; it is preserved in the Hermitage Museum in Saint Petersburg.