The earliest records surrounding development of the Miniature Schnauzer in Germany come from the late 1800s. In the breed's earliest stages, several small breeds were employed in crosses to bring down the size of the well-established Standard Schnauzer, with the goal of creating a duplicate in miniature.

Crossing to other breeds, such as the Affenpinscher and Miniature Pinscher, had the side effect of introducing colors that were not considered acceptable to the ultimate goal -- and as breeders worked towards the stabilization of the gene pool, mismarked particolors and white puppies were removed from breeding programs.

As puppy mills commonly trade breeding stock back and forth, the gene is introduced into other mills (in exchange with Fox Terrier or Poodle infused particolors, etc.) and so the white gene becomes firmly established in that population. Commercial breeders sell to pet stores, and these form the genetic basis of the vast majority of "backyard breeder" dogs. As none of these animals are bred for the show ring, the fact that they do not exhibit quality in type is irrelevant. Crossbred animals would have very great difficulty surviving in the show-breeding gene pool -- they would find it difficult to win or produce offspring who could.