The rhyme was first collected in Britain in the late 1940s. Since Teddy Bears did not come into vogue until the twentieth century it is unlikely to be any older than that in its current form, but Iona and Peter Opie speculated that it might be a version of an older rhyme, collected 1945-9, 'Round about there, went a little hare', with the lyrics:
The nursery rhyme is accompanied by various actions, by the adult on the child or the child on the adult. The child/adult first lightly strokes his or her index finger in slow circles around the child/adult's upturned palm, then with each "step", walks their index and middle finger up the arm, firstly to the elbow and then to the shoulder. Finally after a short pause before the "tickle", they launch a (not unexpected) tickle under the arm.