Rugby School was founded in 1567 as a provision in the will of Lawrence Sheriff, who had made his fortune supplying groceries to Queen Elizabeth I of England. Since Lawrence Sheriff lived in Rugby and the neighbouring Brownsover, the school was intended to be a free grammar school for the boys of those towns. Up to 1667, the school remained in comparative obscurity. Its history during that trying period is characterised mainly by a series of lawsuits between the Howkins family (descendants of the founder's sister), who tried to defeat the intentions of the testator, and the masters and trustees, who tried to carry them out. A final decision was handed down in 1667, confirming the findings of a commission in favour of the trust, and henceforth the school maintained a steady growth. "Floreat Rugbeia" is the traditional school song.
Rugby is most famous for the invention of rugby football, which is played throughout the world. The invention of the game is credited to William Webb Ellis whilst breaking the existing rules of a football match played in 1823 at Rugby School.
Rugby School is one of England's oldest and most prestigious public schools, and was the setting of Thomas Hughes's semi-autobiographical masterpiece Tom Brown's Schooldays. A substantial part of the 2004 dramatisation of the novel, starring Stephen Fry, was filmed on location at Rugby School. Hughes later set up a colony in America for the younger sons of the English gentry, who could not inherit under the laws of primogeniture, naming the town Rugby. The town of Rugby, Tennessee still exists.
Rugby is a birthplace of the jet engine. In April 1937 Frank Whittle built the world's first prototype jet engine at the British Thomson-Houston works in Rugby, and in 1936–41 based himself at Brownsover Hall on the outskirts, where he designed and developed early prototype engines. Much of his work was carried out at nearby Lutterworth. Holography was invented in Rugby by the Hungarian inventor Dennis Gabor in 1947.
In the 19th century, Rugby became famous for its once important railway junction which was the setting for Charles Dickens's story Mugby Junction.