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Sebago was founded in 1946 in Westbrook, Maine, by Daniel J. Wellehan. Prior to Sebago, Wellehan owned five shoe stores. So he decided to open his own shoe factory. He became partners with shoe entrepreneurs, William Beaudoin and Joseph Cordeau.
The brand took its name from Sebago Lake, just a few miles from Westbrook. In the language of the Abenaki Indians, Sebago means "elongated body of water."
The first moccasin was the Penny Loafer. It was created the same year it was founded. It was produced in the Abenaki tradition and sewn by hand. Still today it is a top model of the brand. The first boat shoes were produced in 1948, but their patent was sold to Uniroyal.