The Cusquito is described as "a dog of the world" due to its development taking place in many countries all over the world. In 18th century Southeastern Europe, little Spitz-like dogs would accompany farmers in their daily chores, diverse roles such as vermin hunting, herding and guarding. It is believed that a plague that devastadedone-fourth of the population in Turkey forced some of these little dogs to survive in the wild, breeding among themselves and with native golden jackals, producing packs of these wild hybrids. These wild dogs were hardy and tenacious, but lacked the "fear of man", which resulted in intrusion on their part on other farmers' properties seeking food, even approaching bigger towns and small cities on some occasions.

It was in the 19th century when the Amusant Pour Tous travelling circus happened to stop by at Ankara, the Turkish capital, a dog trainer and performer known as Darian Harlequin took interest in them. Harlequin saw the performing potential in these little canids and acquired two jackal-dog pups, Jana and Commodin. Their small size facilitated travelling, but they were still to wild to be trained as circus dogs.

As the circus travelled all over Europe Harlequin bred his dogs to local dogs of each city they passed, never losing sight of the ideal little performer he sought to create. In Belgium he crossed Jana and to a male short-haired Schipperke, producing two pups, one of which looked like a jackal pup and the other like the sire, all black. The latter, a male named Pitre, was crossed with another short-haired Schipperke, obtaining three pups. Two looked like the parents; the third, a female, resembled Jana. This female was subsequently crossed with Commodin. Of the three pups born out of this litter one looked like Commodin, an agouti wild dog, one resembled more a Schipperke, and the third a small sable fox. Harlequin kept the third pup and from him the Cusquito breed developed.

In England Harlequin used the Jack Russell Terrier's influence, while in The Netherlands the Keshond contributed with the long-haired gene. In Germany the German Pinscher was used to produce a more stylized dog and the Shiba Inu in Japan reinforced some wild-dog habits like scarce barking and an independent and confident nature without losing the trainability gained from the other breeds.

Harlequin's "little mixed dogs" gained so much popularity as performing dogs that they soon became the Amusant's main attraction, luring thousands of spectators from all over. Unfortunately, Darian Harlequin's failing health led to a wean on his dogs' newly acquired attention, as other dog trainers without the passion he transmitted to the canids, only failed to recreate Harlequin's performances.

In 1886, a decade after Harlequin's death and his little dogs becoming forgotten, his daughter, Araceli Harlequin decided to relive his father's legacy, joining the Amusant Pour Tous circus herself. People returned to see the little "fox-dogs" do their tricks.

The name name of the breed came from Darian Harlequin's best friend, an acrobat by the name of Clemente Arenas. He once teased Araceli about her little "cusquitos", meaning "little mixed-breed dogs" in Spanish. The name stuck and became the breed's official name. In August of 1891, Araceli wrote the first breed standard, which was published in a French magazine. Fiver years later, the Cusquito was accepted by the UKC in the non-sporting group and Araceli retired from the circus along with the dogs to become active in the dog showing and breeding community. However, she remained performing on her own to liven the little Cusquito's performing origin.

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