Before remote keyless entry systems started appearing on American Motors vehicles in 1983, the term key fob was generally used to describe any small decorative token attached to a keychain. They were used to add some bulk or personality to an important possession and chosen so that you could quickly identify your set of keys from others.

Some fobs were also functional, taking the form of bottle openers, flashlights or, another relatively recent addition, USB flash drives.

The term may have originated from watch fobs, according to Webopedia, an online dictionary for words related to computer and Internet technology. Coming from the low German dialect for the word Fuppe, meaning "pocket," watch fobs were around as early as 1888. Others have suggested that the term stands for frequency operated button, but that ignores heavy use of the word before the remote keyless entry system.

By emitting a distinct identity code, remote keyless entry fobs (RKEs) lock or unlock a car's doors with the push of a button. Early systems required a clear line-of-sight and used infrared, but were easily copied. Newer models employ challenge-response authentication over radio frequency and are considered much more secure. As the systems developed, additional functions were added: unlocking or opening the trunk or rear tailgate, starting the car's engine, opening sliding side doors on vans.