The tooth fairy tradition, in which a child places a lost baby tooth under their pillow overnight and finds it exchanged for a small coin or gift by morning, is a distinctively American folk custom whose specific fairy figure emerged and standardized largely across the twentieth century, popularized through children's books, newspaper columns and, from the mid century onward, retail and dental industry marketing that helped fix the practice as a shared national custom. The custom sits within a much older and more widespread family of practices across European folk culture concerned with the ritual disposal of a child's lost baby teeth, since many pre-modern communities treated a shed tooth as an object requiring careful handling, commonly burned, buried, or thrown toward the sun with a spoken formula, out of concern that a witch or malevolent spirit gaining possession of the tooth could work harm on the child it came from.
The specifically monetized, gift exchanging American form is a comparatively recent innovation layered onto this much older and more anxious folk practice of protective tooth disposal. Folklorists studying the custom note it spread gradually rather than through any single point of origin, absorbing elements from earlier European tooth-disposal beliefs, from the tradition of household fairies more generally, and from twentieth century commercial print culture aimed at children.