The gold lace sleeve stripes that are a familiar indication of naval officers' rank were introduced to the U.S. Navy by the Uniform Regulations of 1852. At that time, there were four commissioned officer ranks, three of which were indicated by three-quarter inch wide gold lace rank stripes: three for captain, two for commander, and a single stripe for lieutenant. The uniform cuffs had additional decoration of three small buttons at the rear, and a short vertical lace strip to the bottom of the cuff. The lowest officer rank, master, was indicated by three large cuff buttons rather than gold lace. The rank stripes of 1852 were still in use when the Civil War began, but with the rapid expansion of the navy in the next year there was soon a need to account for newly authorized ranks. The system of three-quarter inch stripes was augmented by narrow quarter-inch braids, added to the existing stripes for the extra ranks. The ornamental cuff buttons and the vertical strip were eliminated.

In 1863, this system was replaced by a completely different scheme using only quarter-inch stripes, one added for each higher rank and separated into groups to avoid visual confusion. In addition, line officers added a one-inch diameter gold star above the rank stripes. Similar to the "curl" adopted by the Royal Navy in 1856, the star has continued to the present day. Though 1864 regulations specified that one ray of the star point down toward the rank stripes, for years it would be seen in either "point up" or "point down" configuration depending on the individual.

The all-narrow stripe system lasted a few years after the Civil War, with a couple of changes for the top ranks. In 1866 David G. Farragut's new rank of full admiral was denoted by an arrangement of two two-inch and a one-inch stripe. With an extra-large star bearing a medallion depicting his former flagship Hartford, Farragut's insignia measured over nine inches from top to bottom.

In 1869 new sleeve insignia were introduced, in the half-inch and quarter-inch widths that are still in use today. It would take a few years, however, for the arrangements to reach their present form. Initially, captains were indicated by three half-inch stripes and commanders by two half-inch and one quarter-inch. This only lasted a few months before captains' insignia was increased to four stripes and commanders' to three, corresponding with the Royal Navy insignia already in use. Though the insignia of one broad and three medium stripes was introduced for the rank of admiral, the lone holder of this rank had the option of wearing the more elaborate 1866 insignia.

With other changes ordered in 1874 and finally in 1881, the insignia arrived at the form which remains in use today. The ranks of admiral and vice admiral lapsed in 1891 and 1890 respectively with the deaths of their holders, but the insignia remained on the books in case Congress reestablished the grades. Likewise the rank of commodore was abolished by the Naval Personnel Act of March 1899, but the insignia remained regulation and could be worn by retired commodores. When the victor of the Battle of Manila Bay, George Dewey, was awarded the rank of Admiral of the Navy in 1899, Farragut's insignia of 1866 was revived, minus the special star.