The Bashkir Curly gets it name from the ancient Russian breed, the Bashkir, from which the modern Curly was believed to have descended. However, the American horses may have been incorrectly named. Research done by Shan Thomas for the CS Fund and resulting in the report, Myth and Mystery: The Curly Horse in America, indicates that the Russian breed most often found with the curly coat is the Lokai breed, found in the Taijikistan region. Thomas suggests that the name Bashkir was the result of a "Strange As It Seems" cartoon published in the 1930s or 40s which identifies a "horse with a permanent wave" as a Bashkir. The Damele Family found and kept the cartoon, passing along the information to others.

The name isn't the only mystery surrounding this breed. Various theories have been proposed to explain the presence of the Curly horse in North America. Some have suggested that they came across the Bering Strait land bridge during the last ice age, but no fossil evidence has been found to support that. Others suggest that curly coated horses were imported while the Russians occupied parts of the West Coast of North America. However, Thomas' research shows there was no mention of the importation of horses into North America by Russian settlers in their ship logs. Horses were used on a limited basis during the Russian experimentation with farming during the late 1700s and early 1800s in present day Alaska. Stock breeding was not very successful with most settlements only able to keep a small number of cattle, sheep, pigs and perhaps chickens. In 1817 there were only sixteen horses in Russian America and they were more than likely the hardy Yakut and not the Bashkir or Lokai breeds. It is very unlikely that even this breed of horse could have made the treacherous journey from Alaska to Nevada.

Another theory is that a man by the name of Tom Dixon imported curly horses from northern India to Nevada around 1880. Although this theory cannot be fully proved or disproved the Curly horse was already present in America by that time. Evidence shows that Sioux Indians had Curly horses as early as 1801-02 and in his 1848 autobiography circus master, P. T. Barnum, writes of obtaining and exhibiting a curly horse.

As early as the late 1700s, sightings of curly horses were reported in South America. It seems possible, but cannot be concluded, that the Spanish conquistadors may have brough curly horses, or the curly gene, to South America, as there are several European breeds with curly hair. Another suggestion is that Norse or Celtic explorers brought curly horses to North America prior to 1492 but this theory has yet to be fully investigated. With all of these possibilities as to the origin of this unique breed no definitive answers have yet to be agreed upon.

In separate research, the CS Fund has done blood typing of 200 curly horse in the Serology Lab at UC-Davis. Although one can not definitively identify a horse's breed by it blood type characteristics there are characteristics common to an individual breed. This testing was seen as a method to determine if the Bashkir Curly did in fact display the blood characteristics of a distinct breed. The findings, however, were that the modern curly horse is not a genetically distinct breed, but has been crossed with many other breeds, particularly Quarter Horses and Morgans. The rare and unusual variants that did emerge from this testing are found only in feral horses or those breed based on feral herds. No single blood marker was found to be common in all curly horse.

Today, the American Bashkir Curly has excelled in many events, including barrel racing, pole bending, Western riding, gymkhana, hunter, jumper, roping, cutting, English equitation, English pleasure, Western equitation, Western pleasure, gaited pleasure and competitive and endurance trail riding.