Despite being commonly believed today, people during the Old and Middle English speaking periods never pronounced or spelled "the" as "ye." The confusion derives from the use of the character thorn (&$254) in abbreviations of the word "the," which in Middle English text looked similar to a y with a superscript e (y ^e ).

"Ye" is also sometimes used to represent an Early Modern English form of the word "the," such as in "Ye Olde Shoppe." In this transcription the letter which resembles a 'Y' is actually a thorn (þ), the predecessor to the modern digraph "th." The word "The" was thus written þe. Medieval printing presses did not contain the letter thorn, so the letter y was substituted owing to its similarity with some medieval scripts, especially later ones. This orthography has sometimes led speakers of Modern English to pronounce "ye" as "yi."

In Old English, ye was governed by a simple rule: thou addressed one person, and ye addressed more than one. After the Norman Conquest, which marks the beginning of the French vocabulary influence that characterized the Middle English period, thou was gradually replaced by the plural ye as the form of address for a superior and later for an equal. The practice of matching singular and plural forms with informal and formal connotations is called the T-V distinction, and in English it is largely due to the influence of French.

This began with the practice of addressing kings and other aristocrats in the plural. Eventually, this was generalized, as in French, to address any social superior or stranger with a plural pronoun, which was believed to be more polite. In French, tu was eventually considered either intimate or condescending (and, to a stranger, potentially insulting), while the plural form vous was reserved and formal. In Early Modern English, ye functioned as both an informal plural and formal singular second-person nominative pronoun. "Ye" is still commonly used as an informal plural in Hiberno-English.