As far back as the 19th century, a cookie very similar in appearance to the modern fortune cookie was made in Kyoto, Japan, and there is a Japanese temple tradition of random fortunes, called omikuji. The Japanese version of the cookie differs in several ways: they are a little bit larger; are made of darker dough; and their batter contains sesame and miso. They contain a fortune; however, the small slip of paper was wedged into the bend of the cookie rather than placed inside the hollow portion. This kind of cookie is called tsujiura senbei (辻占煎餅 and is still sold in some regions of Japan, especially in Kanazawa, Ishikawa.[3] It is also sold in the neighborhood of Fushimi Inari-taisha shrine in Kyoto.[4]

Makoto Hagiwara of Golden Gate Park's Japanese Tea Garden in San Francisco is reported to have been the first person in the U.S. to have served the modern version of the cookie when he did so at the tea garden in the early 1900s. The fortune cookies were made by a San Francisco bakery, Benkyodo.[5][6][7]

David Jung, founder of the Hong Kong Noodle Company in Los Angeles, made a competing claim that he invented the cookie in 1918.[8] San Francisco's Court of Historical Review attempted to settle the dispute in 1983. During the proceedings, a fortune cookie was introduced as a piece of evidence with a message reading, "S.F. Judge who rules for L.A. Not Very Smart Cookie". A federal judge of the Court of Historical Review, from San Francisco themselves, determined that the cookie originated with Hagiwara and the court ruled in favor of San Francisco. Subsequently, the city of Los Angeles condemned the decision.[8]

Seiichi Kito, the founder of Fugetsu-do of Little Tokyo in Los Angeles, also claims to have invented the cookie. Kito claims to have gotten the idea of putting a message in a cookie from Omikuji (fortune slip) which are sold at temples and shrines in Japan. According to his story, he sold his cookies to Chinese restaurants where they were greeted with much enthusiasm in both the Los Angeles and San Francisco areas, before spreading.[9]