The Industrial Revolution (1760–1850) began in England and spread throughout Europe and the Americas over the course of the next several decades. The Industrial Revolution did not reach America until the 1820s and began with the textile industries in the Northeast. Expanding technology and the invention of new machines forever changed the way manufacturing and industry took place. The textile industry was greatly impacted by a number of new inventions such as the flying shuttle, the spinning frame and the cotton gin. But it was the invention of the Spinning Jenny by James Hargreaves that is credited with moving the textile industry from homes to factories. The move from a domestic, cottage-based industry to factories allowed the expansion of the Industrial Revolution from England throughout much of the world.

James Hargreaves was a weaver in the village of Stanhill, near Blackburn, Lancashire. Prior to the Industrial Revolution, farming was the main occupation in the area, while the production of cloth from raw goods was carried out as a secondary activity within cottage industries. All work was done by individuals within the home, and entire families were involved. Men were often the weavers, while their wives and daughters spun the raw materials into threads or yarns. Young children assisted in cleaning and preparing the fibres. The process was time-consuming, and merchants wanting to meet the demand for textile goods were often frustrated by the huge gap between supply and demand.

The expense involved in transporting raw materials to numerous locations, waiting for finished textiles to be made by hand, and then the finished goods to be picked up and transported back to the merchant was also an incentive to search for alternatives. While the invention of the flying shuttle and later the power loom made it possible to weave materials faster, the spinning of raw materials into threads and yarns was still done by hand, one thread at a time. Spinners were unable to keep up with the increased demand for threads.

James Hargreaves may have designed the spinning jenny as an improvement over an earlier machine invented by Thomas High in 1763 or 1764. While never patented, High's machine used six spindles that were bolted together and powered by a single large wheel. James Hargreaves' spinning jenny was said to have been designed after he saw his wife's spinning wheel knocked over and saw the spindle continue to spin. The spinning jenny used eight different spindles that were powered by a single wheel. This allowed one spinster to produce eight threads in the same amount of time that it previously took to produce one.

The idea was developed by Hargreaves as a metal frame with eight wooden spindles at one end. A set of eight rovings was attached to a beam on that frame. The rovings when extended passed through two horizontal bars of wood that could be clasped together. These bars could be drawn along the top of the frame by the spinner's left hand, thus extending the thread. The spinner used his right hand to rapidly turn a wheel, which caused all the spindles to revolve, and the thread to be spun. When the bars were returned, the thread wound onto the spindle. A pressing wire, known as a faller, was used to guide the threads onto the right place on the spindle. The rollers were linked to the hand wheel by a cord, which transferred the motion throughout the machine.

Later versions of the spinning jenny added even more spindles, which made the machine too large for home use. This led the way to factories where these larger machines could be run by fewer workers. With machines and workers concentrated in one place, the transportation costs of raw materials and finished goods were greatly reduced. Factory owners also had greater control over workers and began a division of labour that had individuals responsible for different stages of the manufacturing process. This led to increased production and often a demand for workers to keep up with quotas set by the factory owners. The invention of the spinning jenny and other inventions that improved the efficiency and production of textiles were the beginning of the Industrial Revolution that shifted England, Europe, and the United States from agrarian societies to industrial economies.

As with all change, there were advantages and disadvantages to the use of the spinning jenny and other inventions at the time. The spinning jenny allowed more threads and yarns to be produced by fewer spinners. The early spinning jenny also produced a weaker thread than could be produced by hand, so there was a decrease in quality until improvements were made to the machines and a dependable power source became available. With the use of water to power later versions of spinning and weaving machinery, the quality and strength of the cloth produced were greatly improved. While many factors in England, including the availability of workers along with the increased demand for textiles, produced ideal conditions for the economic growth of the textile industry, without the invention of the spinning jenny, progress would have continued at a much slower pace.

A traditional story maintains that the Spinning Jenny was named after one of Hargreaves' daughters or his wife. Yet he had no daughter named Jenny, and his wife was named Elizabeth. The word jenny is an old word used as a reference to an engine. There is some indication that James Hargreaves worked with Thomas High to improve on an earlier invention of a mechanical spinning wheel and improved the design, which was then named a spinning jenny after Thomas High's daughter. Regardless of how the invention came to be named, it changed forever the way textile manufacturing was accomplished and led the way to the Industrial Revolution.