The name Brazil is a shortened form of Terra do Brasil, land of Brazil, a reference to brazilwood, given in the early 16th century to the territories leased to the merchant consortium led by Fernão de Loronha for commercial exploitation of brazilwood for the production of wood dyes for the European textile industry.
The term for the brazilwood tree in Portuguese, pau-brasil, is derived from brasa (ember), a reference to the colour, formed from medieval Latin , from Old French brese, "ember, glowing charcoal", in turn from a West Germanic *brasa).
The land of what became Brazil was first called Ilha de Vera Cruz ("Island of the True Cross") by the Portuguese captain Pedro Álvares Cabral, upon the Portuguese discovery of the land in 1500, probably in honor of the Feast of the Cross (May 3 on the liturgical calendar). This name is found in two letters, one written by Pêro Vaz de Caminha, another by Mestre João Faras, both written during Cabral's landing and dispatched to Lisbon by courier (either André Gonçalves or Gaspar de Lemos, chronicles conflict).
Upon the courier's arrival in Lisbon, it was quickly renamed Terra de Santa Cruz ("Land of the Holy Cross") (hugging the coast on his return trip, the courier must have realized that Brazil was clearly not an island). Italian merchants in Lisbon, who interviewed the returning crews in 1501, recorded its name as the "Land of Parrots" (Terra di Papaga).
The Florentine navigator Amerigo Vespucci joined the follow-up Portuguese expedition in 1501 to map the coast of Brazil. Shortly upon his return to Lisbon, Vespucci authored a famous letter to his former employer Lorenzo di Pierfrancesco de' Medici characterizing it as a "New World". Vespucci's letter, first printed c. 1503 under the title Mundus Novus, became a publishing sensation in Europe.