Designed by a commission including Col. William Moultrie in 1775 it was flown by Moultrie's troops in the defense of Sullivan's Island in 1776. During the battle the flag was shot down, but hoisted again becoming a favorite symbol of the patriot movement in South Carolina and the South.

The original flag was likely a simple blue flag with the crescent in the corner, the word LIBERTY being added after the battle, likely in the crescent itself, while modern reproductions have enlarged the word and moved it to the bottom similar to the Huntington flag used by New York patriots.