Chimayo weaving evolved from a Rio Grande Hispanic weaving tradition identified in the middle 19th century when New Mexico was annexed to the United States by the 1848 Treaty of Guadalupe Hidalgo. A rise in tourism in the Southwest prompted the Hispanic weavers to create a woven product to satisfy tourists and mail-order customers.
A village named Chimayo became the center of weaving activity. Intially new commercial yarns from the eastern United States were supplied by the curio dealers within a cottage industry framework. Some of these products were referred to as "Chimallo Indian Weaving", suggesting an Indian flavor to the design repetoire.
Two excellent books delving into Chimayo weaving are: Chimayo Weaving The Transformation of a Tradition and The Centinela Weavers of Chimayo Unfolding Tradition.