Origin: There's actually a fair debate about the origins of the Australian shepherd.

The longest standing version credits the early formation of today's Aussie to a people known as the Basques. They were some of the earliest people to domesticate animals and during the nineteenth century, they began to immigrate to Australia and to the United States with their sheep and possibly with their dogs. Basque sheep herders also immigrated from Australia to the western United State as Australian wool became more in demand. Americans imported boatloads of Australian sheep in the late 1800s and early 1900s, accompanied by their Basque shepherds and dogs. It was at that time that the "little blue dogs" gained notice by ranchers. The dog adapted to the ruggedness of the western ranges. Over time, Basques' dogs were bred to other good working dogs of Australia and the United States, and they continued to reproduce true to their type. Because the dogs accompanied their Basque herdsmen from Australia, they came to be known as Australian Shepherds, even though they were truly developed in America.

Your other option happens to be that the dogs did indeed come over with the Australian sheep, but, as Basque shepherds were fairly poor and bringing over a dog from the mountains of Spain and France would be fairly hard to do, the dogs they brought with them were Australian. This factors in the creation of the German Coolie and from the looks of them, it's likely the case. For more, please visit Linda Rorem's explanation, as I have found this to be the most thorougly researched outline of this breed's origin.

Early History: In the ranges, he became a dependable herding dog of superior intelligence and a loyal family companion. Any historian knows that these dogs show up quite frequently in photographs taken during the 1800's and early 1900's. As Aussies moved across the States, it became suited to its own region. Legend has it that the Indians held a reverence for these dogs because of their unusual and often blue eyes. Indians left these "sacred dogs" and tier owners unharmed.

Aussies first became known in the public eye with the help of the late Jay Sisler, who introduced Aussies with trick-dog acts preformed at rodeos throughout the United States and Canada during the 1950's and 1960's. Jay's Aussies appeared in several films, one is available for purchase today, Disney's Run Appaloosa Run. Because of his popularity, some of today's Aussies still have Sisler lines in their pedigrees. Two other foundation lines include Jaunita Ely's breeding, a major foundation for today's herding dogs and Nick Smedra, who's dog was out of Fletcher Wood's stock, went on to produce the famous Heard/Flintridge lines, which appear in most of today's conformation stock pedigrees.

In 1957, a small group of fanciers started the Australian Shepherd Club of America (ASCA), and the National Stock Dog Registry became the official Aussie registry. In 1971, ASCA's registry became the official registry for Aussies. At this time, ASCA offered a show and obedience program for members could gain conformation championships, obedience and tracking titles. In 1974, they introduced a stock dog program. The current breed standard was written and approved in January 1977.

In 1985, a few ASCA members petitioned ASCA to seek American Kennel Club (AKC) recognition. It was turned down by the fear that the Aussie would divide and have two types, working, and show. The United States Australian Shepherd Association (USASA) was formed by a few people and they modified the ASCA standard and AKC adopted the Australian Shepherd in 1991. In 1993, the Aussie became eligible for full competition privileges and admitted into the AKC Herding Group.