There are many theories to the origin of copacetic. It is widely accepted that it originated from some form of American slang. This conclusion stems from the slow introduction of the word into the written language mainly through use in periodicals and in character dialog in 20th century novels.

Copacetic may have originated from African American slang in the late 19th century. It was used by African Americans in the American South, most notably by Bill "Bojangles" Robinson, and by jazz musicians in Harlem in the late 19th and early 20th centuries.

One theory claims the origins are from the Creole French language of Louisiana, specifically from the French word coupersètique meaning "able to be coped with".

Copacetic may be a descendant of the Hebrew phrase “hakol beseder”, literally “all is in order everything is alright”; or “hakol betzedek”, meaning “everything is justified”.

Another theory is that copacetic may have originated from Chinook Jargon, a trade language used in the Pacific Northwest to communicate between tribes, and European traders. The preposition "kopa" is very common in the language, and "kopasetty" may have been used to mean "doing just fine". The Chinook Jargon word “copasenee” means "everything is satisfactory".

Copacetic is also supposed to have entered the African American slang lexicon via the Italian of American mobsters.

Copacetic entered the Bombay film industry as a technical descriptive of fund raising, physical production and logistics, as much as of a creative state of mind.