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The precursors to rum date back to antiquity. Development of fermented drinks produced from sugarcane juice is believed to have first occurred either in ancient India or China, and spread from there. An example of such an early drink is brum. Produced by the Malay people, brum dates back thousands of years. Marco Polo also recorded a 14th-century account of a "very good wine of sugar" that was offered to him in what is modern-day Iran.

The first distillation of rum took place on the sugarcane plantations of the Caribbean in the 17th century. Plantation slaves first discovered that molasses, a by-product of the sugar refining process, fermented into alcohol. Later, distillation of these alcoholic by-products concentrated the alcohol and removed impurities, producing the first true rums. Tradition suggests that rum first originated on the island of Barbados. Regardless of its initial source, early Caribbean rums were not known for high quality. A 1651 document from Barbados stated "The chief fuddling they make in the island is Rumbullion, alias Kill-Divil, and this is made of sugar canes distilled, a hot, hellish, and terrible liquor".

Rum in colonial America

After rum's development in the Caribbean, the drink's popularity spread to Colonial America. To support the demand for the drink, the first rum distillery in the colonies was set up in 1664 on current day Staten Island. Boston, Massachusetts had a distillery three years later. The manufacture of rum became early Colonial New England's largest and most prosperous industry. The rum produced there was quite popular, and was even considered the best in the world during much of the 18th century. Rhode Island rum even joined gold as an accepted currency in Europe for a period of time. Estimates of rum consumption in the American colonies before the American Revolutionary War had every man, woman, or child drinking an average of 3 Imperial gallons (13.5 liters) of rum each year.

To support this demand for the molasses to produce rum, along with the increasing demand for sugar in Europe during the 17th and 18th centuries, a labor source to work the sugar plantations in the Caribbean was needed. A triangular trade was established between Africa, the Caribbean, and the colonies to help support this need. The circular exchange of slaves, molasses, and rum was quite profitable, and the disruption to the trade caused by the Sugar Act in 1764 may have even helped cause the American Revolution.

The popularity of rum continued after the American Revolution with George Washington insisting on a barrel of Barbados rum at his 1789 inauguration. Eventually the restrictions on rum from the British islands of the Caribbean combined with the development of American whiskey led to a decline in the drink's popularity.