The roots of Chanderi can be traced back to the Vedic period, when Lord Krishna's cousin, Shishupal, established it. Sometime around the 13th Century, Koshti weavers travelled from Jhansi to Chanderi and settled there. The weavers' handicrafts migrated along with them, giving rise to a new trend in Indian handwoven textiles.

In the 1890s, the true evolution of the textile began when weavers sought to replace hand-spun yarns with mill-made yarns. This development did not deter Chanderi's reputation as one of India's best hubs for handloom. As time passed, many Royal families like the Scinidia's in 1910 encouraged the production of the Chanderi textile. During this particular period, a motif made with a golden thread (zari zardozi embroidery) appeared for the first time and was popularised throughout the country. Many changes were brought about after that, but when the Mughal rule began, the textile became increasingly popular.

 It is said that the textile business reached a major peak at this time. This was made possible because the Mughal royal family had started to adorn beautiful garments made with textile sarees, to be more specific.

Later in the 1930s, when weavers discovered Japanese silk, they replaced their regular cotton warps with silk. The textile quality was modified entirely, but its reputation remained the same. 

Producing the Chanderi textile is a four-stage process that involves procuring raw material, dyeing, warping, and passing the warp.

Buying raw materials like yarns from traders is the first and foremost state of producing any textile. Cotton yarn is brought to Madhya Pradesh from Coimbatore and Jaipur. On the other hand, silk yarn is imported from China, Japan, and Korea and purchased from Karnataka. Once procured, the yarns are dyed by local artisans with adequate training. Dyeing can take anywhere from an hour to a day, depending on the colours being used. After the yarns have been dyed, they're loosened and turned into rounded reels for warping. The next stage is warping, where the yarn is wound onto 'pirns,' a rod-like tool, with the help of a 'charkha,' the spinning wheel. Weavers who specialise in this particular step are called 'warpers.' After this has been completed, the threads are skillfully joined with a twist of hands. Four to five days are required for weavers to fully finish this task. In the production process, an extra stage of designing the pallu is put in if the desired garment is a saree. This occurs before weaving begins, where the ends are knotted at the 'jaala,' a harness. Designing the pallu can introduce an additional three days in the production process. 

Chanderi weaving only has two steps: designing the fibre and dyeing. 

Typically, there are two kinds of designs done in the Chanderi weave. The first one includes the textile's main design, consisting of elements such as the border, motifs, colour combinations, etc. Guidelines for this kind of design are usually provided by the buyers, who send across laminated papers with the design, sample of threads to be used, and positions of the motifs. 

The second kind of designing refers to the more complex, intricate, and difficult patterns that the master weaver does on sheets of graph paper. Depending on the order placed by the buyer, this is also provided to the weavers. 

The last step of the weaving process is dyeing. Although the yarns had already been dyed during the production process, it is repeated one more time. Earlier, light colours like soft-pastel tones were preferred, but vibrant colour combinations like turquoise, navy blue, fuchsia pink, red, black, and white are admired today.