The word saloon originates as an English variant of the French word salon, which itself comes from the Italian salone (meaning "large hall"), an augmentative form of sala ("hall" or "room"). Both the French and Italian terms ultimately trace back to a Germanic root, specifically Proto-Germanic salą, meaning "hall" or "house," which is also the source for similar words in Old High German (sal), Old Norse (salr), and other Germanic languages.

Originally, saloon in English referred to a spacious room set apart for the reception of company or artistic display, mirroring the original sense of salon. Over time, the meaning broadened to include large halls in public places for entertainment (by the mid-18th century), and later, in American English, it came to denote a public bar or tavern, particularly in the context of the American Old West (by 1841).

The semantic evolution reflects the idea of a comfortable, enclosed, and social space—whether a grand room, a public bar, or, in British English, a type of enclosed car body style (the "saloon car," equivalent to the American "sedan").