The kiswah was first introduced during the pre-islamic era. It is disputed whether the kiswah was made by Ishmael, or the great-great grandfather of Muhammad, Adnan bin Ad. However, most sources agree that a King of Humayyur in Yemen was the first to start the traditional draping of the Kaaba.
Muhammad and the Muslims in Mecca did not participate in the draping of the Kaaba until the conquest of the city at 630 CE (7 AH), as the ruling tribe, Quraish, did not allow them to do so. When Mecca was taken by the Muslims, they decided to leave the Kiswah as it was until a woman lighting incense in the Kaaba accidentally burned the Kiswah. Muhammad then draped it with a white Yemeni cloth.
Many notable Caliphs have had their share of ruling over the kiswah. For instance, Muawiyah I used to drape the Kaaba twice a year, along with the help of Abd-Allah ibn al-Zubayr, and Abd al-Malik. They brought the traditional silk covering in to effect. Another Caliph is Al-Nasir, the Abbasid Caliph, notable to his contribution on starting the tradition of dressing the Kaaba with one Kiswah at a time, instead of the now out dated "Accumulation Kiswah", the process of putting new kiswahs on the older one. When the Abbasid Caliph performed Hajj in 160 AH, he saw that the accumulated Kiswah could cause damage to the Kaaba itself. He therefore decreed that only one Kiswah should drape the Kaaba at any one time, and this had been observed ever since. The Caliph Al-Mamoon, draped the Kaaba three times a year, each time with a different color, Red for the eighth Dhu al-Hijjah, White gabati on the first of Rajab, and another Red brocade on the twenty-ninth of Ramadan. Later on, Al-Nasir the Abbaside draped the Kaaba with Green, both AI Nasir and Caliph Al-Mamoon disagreed on the frequent color changes, and decided after that to change the color into black, and black it remains to this day.
From the time of the Ayubids, precisely during the regin of the As-Salih Ayyub, the kiswa was manufactured in Egypt. It was sent in a huge annual parade before the hajj season. Material for the kiswah was brought from Sudan, India, Egypt and Iraq. The tradition continued until the 1960s where King Abd Al Aziz Bin Saud established the kiswah factory. This decision was influenced by the worsening relations between the Nasser regime of Egypt and the government of Saudi Arabia in addition to the worsening quality of the Egyptian made kiswah.
King Abd Al Aziz Bin Saud, concerned for the custody of the Two holy Mosques, ordered that a factory for manufacturing the Kiswah and in the same year, the Holy Kabah Kiswah factory was founded, and the first Kiswah was produced.