Muso Shinden-ryu traces its roots back to Hayashizaki Minamoto no Shigenobu (1546 - 1621). At the age of 21 he went to a Shinto shrine and stayed there for 100 days. According to a vision he received in a dream, he developed the batto-techniques, where one draws the sword and strikes with a single motion. He called his style Shimmei Muso-ryu. This was the first systematized iai school, although similar fast-draw techniques were already used in some of the older schools of kenjutsu.
Muso Shinden Ryu as we know it today was born in the early 1900's by Nakayama Hakudo Sensei, a man who had dedicated his life to the study of kendo and iai, came to the conclusion that the classical arts should be reinterpreted and opened to the general public in order for them to survive in the changing world. He reorganized the Muso Shinden-ryu kata using techniques from Omori Ryu and Eishin Ryu. He stressed the importance of sword training, no longer as a just a practical art, but as a method of improving oneself. The sword is no longer a tool for cutting down your enemy, but a tool for cutting your ego as well.