The authors agree that the surname derives from the medieval term for "hat" —in Italian cappèllo, with northern dialectal variants such as capèl, capèlo or capélu, and southern ones such as cappiéllo or cappillo— and that it alludes to the trade of maker or seller of hats.

E. De Felice documents the oldest forms: in Florence, in 1260, Cappellus and Arnaldus cappellaius are recorded; in Trentino, Cappelletus; and in Genoa, in 1156, Capellus. He notes that the surname is of pan-Italian distribution in the forms with Capp-, and of northern root in the forms with Cap-. He indicates that Cappiello is peculiar to the Naples area, Cappilli to the Salento area —that is, the southernmost zone of the Puglia region, in southern Italy—, and Cappellìn and Cappellutti to the northeast of Italy, in the regions of Veneto, Friuli-Venezia Giulia and Trentino-Alto Adige.

F. Miranda adds that the term goes back to the medieval Latin cappellus, derived in turn from cappa, "hood". He also notes that in southern Italy this type of surname was usually attributed to cultured or aristocratic people, to distinguish them from the common folk.