Written for performance by the New York blackface troupe Christy's Minstrels, the song has E. P. Christy, the troupe's leader, appearing as its creator on early printings of the sheet music. Christy had paid Foster to be credited, something Foster himself had suggested though later regretted.

Foster had composed most of the lyrics but was trying to give a name to the river of the opening line and asked his brother to suggest one. The first suggestion was "Yazoo" (in Mississippi), which despite fitting the melody perfectly, Foster rejected. The second suggestion was "Pee Dee" (in South Carolina), to which Foster said, "Oh pshaw! I won't have that." His brother then consulted an atlas and called out "Suwannee!" Foster said "That's it exactly!" He wrote it in immediately (misspelling it "Swanee" to fit the melody).

Foster himself never saw the Suwannee or even visited Florida, but the popularity of the song initiated tourism to Florida to see the river and since 1935 it has been the official state song of Florida, although in 2008 the original lyrics were expurgated.

As the official state song of Florida, "Old Folks at Home" has traditionally been sung as part of a Florida governor's inauguration ceremony. However, over time, the lyrics were progressively altered to be less offensive; as Diane Roberts observed:

Florida got enlightened in 1978; we substituted "brothers" for "darkies." There were subsequent revisions. At Jeb Bush's second inauguration as governor in 2003, a young black woman gave a moving, non-dialect rendition of "Old Folks at Home," except "still longing for the old plantation" came out "still longing for my old connection." Perhaps someone confused Stephen Foster's lyrics with a cell phone commercial.