The Navajo-churro breed is descended from the sheep introduced to the Rio Grande valley by the Hispanic people who settled there in the late sixteenth and early seventeenth century, about the time that the Massachusetts Bay Colony and New Amsterdam were being settled in eastern North America and the French were settling in what is now Quebec. These sheep are drought tolerant and well adapted to the climate of the southwest. The Navajos were living in close proximity to the new Hispanic communities and learned sheep raising and the use of wool from their not always peaceful interactions with the Hispanic settlers. Navajo-churro sheep are dual coated and their soft, crimpless inner fleece was used to produce the finely spun and woven Chief Blankets which gained the Navajos fame as some of the greatest weavers in the world.
During the period from 1864 to 1868, the Navajos were incarcerated at the Bosque Redondo near Ft. Sumner, New Mexico in a misguided attempt to stop raiding and violence in the southwest, which was rapidly opening up to settlement in the aftermath of the Civil War. The Navajos' flocks of Navajo-churro sheep, thought to number about 200,000, were destroyed and by 1868, only about 6.000 sheep are known to have survived. Through great personal sacrifice, the Navajos rebuilt their flocks and by the 1890's they were once again able to weave with their own "free" wool as their weaving focus shifted into the burgeoning market for rugs. The strong outer coat of the Navajo-churro was blended with the inner coat to produce a lustrous and durable weft yarn and it also made an excellent warp thread that often survives even if the weft yarns are worn away. In the late 1930's, the Navajos' flocks were again forcibly destroyed and the government required them to raise Rambouillet-Suffolk hybrid sheep that had wool and meat that was markedly greasier. The aim of the government was to stop the overgrazing that was thought to be contributing to the Dust Bowl. Navajo weavers eventually adapted to using this wool, but it negatively impacted the quality of their weaving for years as they did so.