A significant proportion of linguists no longer subscribes to the theory of a language tree, widely approved only a dozen or so years ago. According to that theory, all Finno-Ugric languages, similar to Indo-European and other language groups, have developed from one proto-language. Consequently, doubt has been cast on a large number of assumptions about when changes occurred in pre-written Estonian, and about the time when the characteristic features became established. Several hypotheses about the development of the Estonian language during the earliest period of development up to the 13th century are now also considered to be of dubious reliability.

It is, however, unanimously agreed that ancient Estonian was influenced by various Germanic, Baltic and ancient Slavonic languages. This is proved by multiple loan words and several shifts in pronunciation (see Vocabulary).

Probably the oldest recorded instance of an Estonian word dates from the 8th century AD: in his Cosmographia, clergyman Aethicus Ister mentioned an island called Taraconta (Tharaconta), denoting probably either the whole of Estonia or its largest island Saaremaa. (Describing Estonia as an island is not so strange as it may seem, considering that as late as the 11th century, the North German chronicler Adam of Bremen thought that Estonia and Scandinavia were parts of a large archipelago.) Taraconta can be interpreted as Taara + kond. Taara was one of the most important gods of ancient Estonians; the affix kond in Estonian denotes a fellowship of people, e.g. perekond 'family', sugukond 'clan', or territorial unit, e.g. maakond 'county', kihelkond 'parish'. Thus Taraconta could easily refer to Estonians as the worshippers of Taara.

The stage of development of the Estonian language covered by more thorough written sources started in the 13th century. This was the time when German and Scandinavian crusaders reached Estonia, one of the last pagan countries in Europe. The crusades against the Estonians are described in the early 13th century in the Latin chronicle Heinrici Chronicon Livoniae, which already contains words and fragments of sentences in Estonian.

Numerous Estonian proper names and place names date from the 13th century as well: thus the Danish taxation list, Liber Census Daniae, compiled between 1219 and 1220, already includes about five hundred place names from Northern Estonia. All but fifty of them have survived until today, and offer ample comparative material, fixed in many documents, to research the language changes.

As a result of the crusades, the predominantly Low German nobility and burghers became established on the territory of Old Livonia, which covered areas of the present day Estonia and Latvia. Although the rulers of Estonia changed several times during the 700 years of foreign occupation - i.e. by Denmark, Poland, Sweden and Russia - the strongest influence on the Estonian language was exerted by Low and High German, and by the local Baltic German dialect that developed from them.

The first continuous Estonian text still extant, the Kullamaa Manuscript, dates from 1524-1528. This Catholic text contains two prayers - the Lord's Prayer and the Hail Mary -, and the Creed. When the Reformation shook Northern Europe, arriving in Estonia in the early 16th century, preaching in the local languages brought about an even more pressing need to translate religious literature into the North and South Estonian.

The first Estonian grammars and dictionaries were compiled in the 17th century. From that time onwards, abundant Estonian-language literature has survived to our day.

During the National Awakening in the mid-19th century, the Estonian language rapidly advanced from being the spoken idiom of the peasants to becoming a cultural language. It began to be used in literature and science, and the first native-language discourses on Estonian were published. In 1884, Karl August Hermann published the first Estonian grammar in the Estonian language; this played a significant role in standardising the language.

At the same time, in the late 19th century, the indigenous Estonian population began calling itself by the name eesti, which was probably borrowed, from the Swedish or German in the 17th century. Until that time the majority of Estonians - the peasantry - called themselves maarahvas 'country people', and their vernacular maakeel 'country language'.

During the first decades of the 20th century, the Estonian intelligentsia set themselves the conscious task of turning the Estonian language into a European cultural language. An essential part in that was played by Johannes Aavik who tried to make the literary language richer and more beautiful. He relied on the material provided by the Finnish language and Estonian dialects, but also coined artificial words and forms. Johannes Voldemar Veski set another trend, equally significant from the point of view of innovation, which focused on producing the normative forms and furthering the terminology. His paramount contribution was the standardisation of Estonian word derivational affixes. It is worth mentioning that the authorities had thousands of terms in science and in all other fields of life created at that period.

During the 20th century, an important role in shaping the standard language has been played by normative dictionaries. The first normative and regulative dictionary of the Estonian language appeared in 1918.

During the years of the Soviet occupation - 1940-1991 - standardising the language and closely following the norms became a form of national resistance. This was a way of opposing the Soviet ideology, as symbolised by the Russian language. Language remained one of the most powerful tokens of Estonian identity. Neither the scientific study of Estonian, nor the use of Estonian in most of the spheres of public life including higher education, were prohibited by the Soviet authorities, and this enabled Estonians and their language to survive both Russification and colonisation.

In the 1990s, the attitude towards language norms has become more open; different sociolects and linguistic variety are appreciated once again.