Manchester Terrier breed history begins in England, where in the early 1800s rat-baiting was a popular sport among common folk. One of the past time's most popular enthusiasts was Manchester resident John Hulme, who in order to create a smaller, more dexterous rat-catching dog, began crossbreeding Whippets with Black and Tan Terriers (now extinct). Eventually a new, distinct terrier type emerged; since Manchester was the epicenter of the breed's development, by the mid-nineteenth century the breed was known as the Manchester Terrier.
Even after the sport of rat-baiting became illegal, England still had large rat infestations in many of its inns, restaurants, and other public places, so Manchester Terriers became highly-prized dogs, as they would be set loose after the establishments closed to hunt vermin. Some English people, desiring an even smaller version of the breed, began crossing Manchesters with Chihuahuas and other toy breeds, establishing two variations of the Manchester Terrier (which eventually split into two separate breeds: the standard-sized Manchester Terrier, and the smaller English Toy Terrier).
In the U.S., meanwhile, the breed gained popularity in the early twentieth century. In 1923, the Manchester Terrier Club of America was established; that organization's breed standard, however, recognizes both sizes of the breed as variations of one breed--the Toy and the Standard.
Today, the Manchester Terrier is fairly common worldwide, with its popularity centered in Europe and North America. The Manchester Terrier (which includes both the Toy and the Standard variations) ranks 133rd out of 202 breeds recognized by the American Kennel Club.