The ZIP in ZIP code is an acronym for "Zoning Improvement Plan". In the early 1960s, huge increase in mail volume forced the United States Postal Service to look at new automated methods of sorting and delivering the mail. The USPS also examined different coding systems to aid in the mechanization process. After reviewing several new systems, the USPS officially adopted the Zone Improvement Plan in 1963. The plan assigned a five-digit code to every address in the United States.

The first digit designated a broad geographical area of the United States, ranging from zero for the Northeast to nine for the far West. This was followed by two digits that more closely pinpointed population concentrations and those sectional centers accessible to common transportation networks. The final two digits designated small post offices or postal zones in larger zoned cities.

ZIP+4 was introduced in 1983 which tacked another four digits onto the existing ZIP codes. With this additional number, the USPS could more accurately pinpoint a particular delivery location.