Green tea originated in China for medicinal purposes, and its first recorded use was approx 5,000 years ago. By the third century, it became a daily drink and cultivation and processing began. Today, China has hundreds of different types of green teas. Other producers of green tea include India, Indonesia, Korea, Nepal, Sri Lanka, Taiwan, and Vietnam. Green tea was first introduced in Japan during the Nara period (710-794), when numerous Japanese Buddhist monks visited China and brought tea seeds back to Japan. The Japanese tea industry is said to have begun in 1191, when the monk Eisai planted tea seeds from China on temple land. He then encouraged the cultivation of tea in other areas of Japan by extolling the health benefits of tea drinking.

The making and serving tea as an art form (sado, the way of tea) was introduced in Japan during the eleventh century. The origins go back to China's Tang dynasty (618-907), when a ritual was performed in Buddhist temples. A brick of tea was ground to a powder, mixed in a kettle with hot water, and ladled into ceramic bowls. One of the first Japanese uses of the tea ceremony in public was when Toyotomi Hideyoshi, then the most powerful warlord in Japan, held a tea party in his camp the evening before a large battle in order to calm his warriors and inspire morale. Hideyoshi's own sado teacher, Senno Rikyo, is also credited with elevating tea from a simple beverage to a highly respected method of self-realization. Today, there are tea schools in Japan to learn the proper methods of the tea ceremony or chanoyu. The Urasenke School is the most active and has the largest following. The form of chanoyu that is practiced today was established in the second half of the sixteenth century by Rikyu. Chanoyu involves more than merely enjoying a cup of tea in a stylized manner. The ceremony developed under the influence of Zen Buddhism aims to purify the soul by becoming one with nature. The true spirit of the tea ceremony has been described by such terms as calmness, rusticity, and gracefulness. The rules of etiquette are carefully calculated to achieve the highest possible economy of movement.

For some 500 years after tea was introduced to Japan, it was used in its powdered form only. It was not until the mid-sixteenth century that the processing method for conventional green tea was invented. Prior to the Edo period (1600-1868), the consumption of tea was limited to the ruling class. Only after the beginning of the twentieth century, with the introduction of mass production techniques, did tea achieve widespread popularity among the general population. Today, tea leaves for green tea are grown in the warmer southern regions of Japan, with about half produced in Shizuoka Prefecture. Uji, a district near the ancient city of Kyoto (and the district from which the finest Japanese tea comes from to this day) became the first tea-growing region in Japan. Later, tea plantations were planted in Shizuoka Prefecture and, finally to surrounding regions. A total of about 100,000 tons of green tea is produced per year from 60,000 hectares of tea fields. Only green tea is produced in Japan.

Though traditionally green tea was produced manually, the process has been fully mechanized in Japan. The various types of tea now produced differ according to cultivation practices and processing methods. Sencha is a tea with three quality levels: high, medium, and low. It is manufactured from the tender top two leaves and the shoots for the high and medium grades and from the third from the top leaf for the low grade. Sencha, which comprises 80% of all green tea production, consists of tiny dark green needle-shaped pieces. Almost immediately after picking, the leaves are steamed for about 30 seconds to seal in the flavour, followed by drying, pressing, and rolling steps. Gyokura is the highest grade of tea and is made from the most tender leaves that are grown under 90% shade using bamboo blinds. Matcha is made from similar leaves and is processed into a powder form for exclusive use in the tea ceremony. Bancha is a low-grade coarse tea made from older leaves picked after Sencha leaves are picked or picked in the summer. It is generally composed of lower grade tea leaves, which are divided into two kinds: large leaf, and small leaf.