Dylan based the song on the traditional British folk ballad "Leaving of Liverpool". He first played it for friends in Greenwich Village after returning from a two-week trip to London in early January 1963. In "Leaving of Liverpool", the ballad's first verse and chorus tell the tale of someone sailing from Liverpool to California, bound to miss the loved one left behind.
"The Raggle Taggle Gypsy", is a traditional folk song that originated as a Scottish border ballad, and has been popular throughout Britain, Ireland and North America. It concerns a rich lady who runs off to join the gypsies (or one gypsy). Common alternative names are "Gypsy Davy", "The Raggle Taggle Gypsies O", "The Gypsy Laddie(s)", "Black Jack David" (or "Davy") and "Seven Yellow Gypsies".
Dylan scholar Michael Gray sees a strong parallel between this and the traditional folk song "Blackjack Davey," which Dylan arranged and recorded for his 1992 album Good as I Been to You, and in which footwear "of Spanish leather" also plays a significant role. However, comparisons are more often made between this song and the traditional ballad "Scarborough Fair" (from which Dylan's "Girl from the North Country" is also drawn), both regarding melody and lyrics, as it also consists of alternating male and female narrators. Lyrically, "Boots of Spanish Leather" is unusual in that it uses the epistolary format. It has been described as a "restless, forlorn ballad for the ages and sages—a classic Dylan tale of two lovers, a crossroads, and the open sea".The song is written as a dialogue, with the first six stanzas alternating between the two lovers; however, the last three stanzas are given by the lover who has been left behind. Within these nine stanzas, one of the lovers—a woman—goes across the sea. She writes, asking whether her lover would like any gift and he refuses, stating that he only wants her back. Towards the end it becomes clear that she is not returning, and she finally writes saying she may never come back. Her lover comes to realize what has happened and finally gives her a material request: "Spanish boots of Spanish leather".