The origin of the espresso-based caffe latte came from Berkeley's Caffe Mediterraneum, created by then owner Lino Meiorin in 1959. As the sign inside states: "Caffe Latte Invented Here - While Seattle may have made this drink famous, It was invented here at the Caffe Mediterraneum in the late 1950’s. Lino Meiorin, one of the owners, was the first Italian-trained barista in the Bay Area. Customers were not used to the strong flavor of a traditional Italian cappuccino and would ask Lino for more milk. Speaking in Italian, he would tell the barista to put more latte (milk) in their cup. Finally he thought of putting a larger drink on the menu with the same amount of espresso but more steamed milk, and calling it a caffe latte. At first it was served in a bowl but soon they switched to a pint beer glass. Today lattes are often served in a wide mouth cup in order to show off hearts, rosettas and other latte art designs.”
Extensive write-up in Kenneth Davids's Coffee: A Guide to Buying, Brewing and Enjoying. "At least until recently, ordering a "latte" in Italy got you a puzzled look and a cold glass of milk. The American-style caffe latte did not exist in Italian caffes, except perhaps in a few places dominated by American tourists...Obviously breakfast drinks of this kind have existed in Europe for generations, but the caffe version of this drink is an American invention...."
In Italy, caffe latte is almost always prepared at home, for breakfast only. The coffee is brewed with a stovetop Moka and poured into a cup containing heated milk. (The Moka does not produce true espresso, but rather a double-strength coffee. Also, unlike the international latte drink, the milk in the Italian original is not foamed.)
Outside Italy, a latte is typically prepared with approximately one third espresso and two-thirds steamed milk, with a layer of foamed milk approximately 5 mm (¼ inch) thick on the top. The drink is similar to a cappuccino, the difference being that a cappuccino has half the amount of milk. Lattes also typically have a far lower amount of foam than a cappuccino. A variant on the latte is the flat white, which is a serving fill of about one-third espresso, with steamed milk then added, while holding no froth at the top.