The term Habesha (Ge'ez ሐበሻ ḥabašā, Amh. hābešā, Tgn. ḥābešā; sometimes Amh. Abesha, አበሻ ābešā), while sometimes described as referring to all Ethiopians and Eritreans refers more specifically to the Semitic-speaking peoples of those countries. It is sometimes used to refer to just the two politically dominant Semitic-speaking Amhara and Tigray-Tigrinya ethnic groups of Ethiopia and Eritrea. The Amhara and Tigray tribes combined make up about 36% of Ethiopia's population (ca. 23 million Amhara, 4.5 million Tigray) while Tigrinyas make up about half of Eritrea's population (ca. 2.25 of 4.5 million).

The ancient Ethiopian Kingdom of Aksum subjugated and assimilated the non-Habesha Cushitic-speaking Agaw and Afar groups located in present-day Eritrea and Ethiopia, and today Cushitic groups like the Oromo and Afar often feel marginalized in what they see as an Amhara- and Tigray-dominated Ethiopia. The term "Habesha" is often mistakenlyHerausgegeben von Uhlig, Siegbert, Encyclopaedia Aethiopica: D-Ha. Wiesbaden:Harrassowitz Verlag, 2005. pp. 948. thought to be of Arabic descent (who used the word Habash, also the name of an Ottoman province comprising parts of modern-day Eritrea), because the English name Abyssinia comes from the Arabic form.Stuart Munro-Hay. Aksum: A Civilization of Late Antiquity. Edinburgh: University Press. 1991. pp. 19. South Arabian expert Eduard Glaser claimed that the hieroglyphic ḫbstjw, used in reference to "a foreign people from the incense-producing regions" (i.e. Punt, probably located around southern Eritrea, northern Ethiopia, and the Sudanese border) used by Queen Hatshepsut ca. 1460 BC, was the first usage of the term or somehow connected, a claim repeated by others; however, this etymology is not at all certain, given the large time difference in the usage of the terms.

The modern term derives from the vocalized Ge'ez ሐበሣ (ḥabašā), first written unvocalized as ሐበሠ (ḥbšt or ḥbst — both spelled with a shin, where the consonants š and s were merged) or the "pseudo-Sabaic ḥbštm". The earliest known use of the term dates to the second or third century AD South Arabian inscription, recounting to the defeat of the Aksumite king (nəgus) GDRT (vocalized Gadarat or Gedara) of Aksum and HBSHT.Stuart Munro-Hay. Aksum: A Civilization of Late Antiquity. Edinburgh: University Press. 1991. pp. 39. The term "Habashat" seems to refer to a group of peoples, however, rather than a specifc tribe, as evidenced by an inscription by the Himyarite king Shamir Yuhahmid, an ally of Aksum under `DBH in the first quarter of the 3rd century AD:

Shamir of Dhu-Raydan and Himyar had called in the help of the clans of Habashat for war against the kings of Saba; but Ilmuqah granted . . . the submission of Shamir of Dhu-Raydan and the clans of Habashat.Stuart Munro-Hay. Aksum: A Civilization of Late Antiquity. Edinburgh: University Press. 1991. pp. 66.

Later, in the reign of King Ezana (ca. early 4th c. AD, the term is listed as one of the nine regions under his domain, translated in the Greek version of his inscription as Αἰθιοπία, the first known use of this term to specifically describe the region known today as Ethiopia (and not Kush or the entire black African and Indian region). The 6th c. author Stephanus of Byzantium later used the term "Αβασηγοί" (i.e. Abasēnoi) in reference to:

an Arabian people living next to the Sabaeans together with the Ḥaḍramites. The region of the Abasēnoi produce[d] myrrh, incense and cotton and they cultivate[d] a plant qhich yields a purple dye (probably wars, i.e. Fleminga Grahamiana). It lies on a route which leads from Zabīd on the coastal plain to the Ḥimyarite capital Ẓafār.

The Abasēnoi spoken of by Stephanus was located by Hermann von Wissman as a region in the Jabal Hubaysh (perhaps related in etymology with the ḥbš root). Other places names in Yemen contain the ḥbš root, such as the Jabal Habashi (Ḥabaši), whose residents are still called al-Ahbuš (pl. of Ḥabaš). Herausgegeben von Uhlig, Siegbert, Encyclopaedia Aethiopica: D-Ha. Wiesbaden:Harrassowitz Verlag, 2005. pp. 949. Traditional scholarship has assumed that the Habashat were a tribe from modern-day Yemen that migrated to Ethiopia. However, the Sabaic inscriptions only use the term ḥbšt to the refer to the Kingdom of Aksum and its inhabitants, especially during the 3rd c., when the ḥbšt (Aksumites) were often at war with the Sabaeans and Himyraites. The location of the Abasēnoi in Yemen may perhaps be explained by remnant Aksumite populations from the 520s conquest by King Kaleb; King Ezana's claims to Sahlen (Saba) and Dhu-Raydan (Himyar) during a time when such control was unlikely may indicate an Aksumite presence or coastal foothold.Stuart Munro-Hay. Aksum: A Civilization of Late Antiquity. Edinburgh: University Press. 1991. pp. 72.

The first recorded kingdom in Ethiopian history was the kingdom of D'MT (vocalized as Da'amat, Da'amot, Di'amat, etc.), though little is known of this first millennium BC kingdom. The more well known Kingdom of Aksum followed D'MT, possibly emerging around the 3rd century BC (or as late as 100 AD). It has commonly been thought to be founded by Semitic-speaking Sabaeans who crossed the Red Sea from South Arabia (modern Yemen), but some scholars contend that it was an indigenous successor of the older D’mt or Da'amot kingdom, pointing to evidence of a Semitic speaking presence at least as early as 2000 BC, as well as evidence suggesting that Sabaean immigrants remained in Ethiopia for only a few decades.

Habesha speak Semitic languages, but they intermarried and absorbed the surrounding indigenous Cushitic-speaking peoples to a great extent. While Habeshas are often though to be "Semitic," this term (as well as the term Cushitic) is merely a linguistic one, and has no bearing on ethnicity. However, according to some Ethiopian sources[[Citing sources citation needed]], the name "Habesha" is a synonym for dibilliq ("mixed"), referring to the hybrid mixture of Semites from Yemen with the indigenous "Hamitic" (ie, Cushitic) peoples, and is thus explained as Ham "-be-" (with) Shem.

Both the Amharic and Tigrinya languages are descended from the ancient Ge'ez, still used in the Ethiopian Orthodox Church. According to tradition, the Habesha people also trace their roots back to Menelik I who was the son of the Queen of Sheba and King Solomon, whose lineage historically gave kings a divine right to rule.