This stringed folk instrument was developed somewhere in the Appalachian Mountains in the early 1800s, and possibly earlier. Instruments identified as dulcimers appear in Pendleton County estate listings in 1826, 1833, and 1836. By the late 1800s, the dulcimer was widely built and played throughout the region. Because it was largely unknown outside the mountains until recently, the dulcimer remains the most recognizably Appalachian of instruments.

The dulcimer consists of three metal strings stretched across a slender wooden box about three feet long, with a fingerboard fretted to produce a major scale. The dulcimer was probably adapted from a Pennsylvania German folk zither, but differs significantly in appearance and use. The instrument is not difficult to build, and artisans of varying ability produced dulcimers with a variety of shapes, dimensions, materials, and construction details.

In the older style of playing, the musician sat with the instrument face up across the knees, and strummed with a flexible pick in the right hand. The left hand fretted one string to produce a melody, while the other two strings droned. Little is known of how the dulcimer was used socially, but its quiet tone makes it more suitable for playing melodies or for vocal accompaniment than for leading a dance.

Unable to compete with more assertive instruments such as the fiddle, banjo, and guitar, the dulcimer largely disappeared from public as the string band tradition developed in the early 20th century. The instrument was revived after mid-century through the deliberate practice of folklorists such as Patrick Gainer and folk performers such as Basil Blake of Gilmer County. Since about the same time, the dulcimer has spread beyond Appalachia. Modern instruments are sometimes built with four or more strings, and musicians have developed techniques for playing a wide range of music. Ray Epler and Jim Good, both of Roane County, have been noted dulcimer builders.

Today the dulcimer is often called the "Appalachian dulcimer" to distinguish it from the unrelated hammered dulcimer, a many-stringed trapezoidal instrument played with small hand-held mallets.