The Celtic languages are descended from Proto-Celtic, or "Common Celtic", a branch of the greater Indo-European language family. The term "Celtic" was used to describe this language group by Edward Lhuyd in 1707, having much earlier been used by Greek and Roman writers to describe tribes in central Gaul. During the 1st millennium BC, they were spoken across Europe, from the Bay of Biscay and the North Sea, up the Rhine and down the Danube to the Black Sea and the Upper Balkan Peninsula, and into Asia Minor (Galatia). Today, Celtic languages are limited to a few areas on the western fringe of Europe, notably Ireland, the peninsula of Brittany in France, and areas of Great Britain including Wales, Scotland and Cornwall. Celtic languages are also spoken on the Isle of Man, Cape Breton Island and in Patagonia. The spread to Cape Breton and Patagonia occurred in modern times. In all these areas the Celtic languages are now only spoken by minorities although there are continuing efforts at revival. Although Celtic languages were spoken in Australia before federation in 1901, these have died out.

Proto-Celtic apparently divided into four sub-families:

• Gaulish and its close relatives Lepontic, Noric, and Galatian. These languages were once spoken in a wide arc from France to Turkey and from Belgium to northern Italy. They are now all extinct.
• Celtiberian, anciently spoken in the Iberian peninsula,^[1] in the areas of modern Northern Portugal, and Galicia, Asturias, Cantabria, Aragón, and León in Spain. Lusitanian, from Southern Portugal, may also have been a Celtic language. These are now also extinct.
• Goidelic, including Irish, Scottish Gaelic, and Manx. At one time there were Irish on the coast of southwest England and on the coast of north and south Wales.
• Brythonic, including Welsh, Breton, Cornish, Cumbric, and possibly also Pictish though this may be a sister language rather than a daughter of British (Common Brythonic).^[2] Before the arrival of Scotti on the Isle of Man in the 9th century there may have been a Brythonic language in the Isle of Man^[3].

Scholarly handling of the Celtic languages has been rather argumentative owing to lack of much primary source data. Some scholars distinguish Continental Celtic and Insular Celtic, arguing that the differences between the Goidelic and Brythonic languages arose after these split off from the Continental Celtic languages. Other scholars distinguish between P-Celtic and Q-Celtic, putting most the Gaulish and Brythonic languages in the former group and the Goidelic and Celtiberian languages in the latter. The P-Celtic languages (also called Gallo-Brittonic) are sometimes seen as a central innovating area as opposed to the more conservative peripheral Q-Celtic languages.

The Breton language is Brythonic, not Gaulish, though there may be some input from the latter. When the Anglo-Saxons moved into Great Britain, several waves of the native Britons crossed the English Channel and landed in Brittany. They brought with them their Brythonic language, which evolved into Breton – still partially intelligible by modern Welsh speakers.

In the P/Q classification scheme the first language to split off from Proto-Celtic was Gaelic. It has characteristics that some scholars see as archaic but others see as also being in the Brythonic languages (see Schmidt). With the Insular/Continental classification scheme the split of the former into Gaelic and Brythonic is seen as being late.

The distinction of Celtic into these four sub-families most likely occurred about 900 BC according to Gray and Atkinson but, because of estimation uncertainty, it could be any time between 1200 and 800 BC. However, they only considered Gaelic and Brythonic. The controversial paper by Forster and Toth included Gaulish and put the break-up much earlier at 3200 BC ± 1500 years. They support the Insular Celtic hypothesis. The early Celts were commonly associated with the archaeological Urnfield culture, the Hallstatt culture, and the La Tène culture, though the earlier assumption of association between language and culture is now considered to be less strong.

Although there are many differences between the individual Celtic languages, they do show many family resemblances. While none of these characteristics is necessarily unique to the Celtic languages, there are few if any other languages which possess them all. They include:

• consonant mutations (Insular Celtic only)
• inflected prepositions (Insular Celtic only)
• two grammatical genders (modern Insular Celtic only; Old Irish and the Continental languages had three genders)
• a vigesimal number system (counting by twenties)
• verb-subject-object (VSO) word order (probably Insular Celtic only)
• an interplay between the subjunctive, future, imperfect, and habitual, to the point that some tenses and moods have ousted others
• an impersonal or autonomous verb form serving as a passive or intransitive
  • Welsh dysgaf "I teach" vs. dysgir "is taught, one teaches", Irish "déanaim" "I do/make" vs. "déantar" "is done"
• no infinitives, replaced by a quasi-nominal verb form called the verbal noun or verbnoun
• frequent use of vowel mutation as a morphological device, e.g. formation of plurals, verbal stems, etc.
• use of preverbal particles to signal either subordination or illocutionary force of the following clause
  • mutation-distinguished subordinators/relativizers
  • particles for negation, interrogation, and occasionally for affirmative declarations
• infixed pronouns positioned between particles and verbs
• lack of simple verb for the imperfective "have" process, with possession conveyed by a composite structure, usually BE + preposition
• use of periphrastic phrases to express verbal tense, voice, or aspectual distinctions
• distinction by function of the two versions of BE verbs traditionally labelled substantive (or existential) and copula
• bifurcated demonstrative structure
• suffixed pronominal supplements, called confirming or supplementary pronouns
• use of singulars and/or special forms of counted nouns, and use of a singulative suffix to make singular forms from plurals, where older singulars have disappeared

Examples:
(Irish) Ná bac le mac an bhacaigh is ní bhacfaidh mac an bhacaigh leat.
(Literal translation) Don't bother with son the beggar's and not will-bother son the beggar's with-you.

• bhacaigh is the genitive of bacach. The igh the result of affection; the bh is the lenited form of b.
• leat is the second person singular inflected form of the preposition le.
• The order is verb subject object (VSO) in the second half - compare this to English or French which are normally Subject Verb Object in word order.

(Welsh) pedwar ar bymtheg a phedwar ugain
(literally) four on fifteen and four twenties

• bymtheg is a mutated form of pymtheg, which is pump ("five") plus deg ("ten"). Likewise, phedwar is a mutated form of pedwar.
• The multiples of ten are deg, ugain, deg ar hugain, deugain, hanner cant, trigain, deg a thrigain, pedwar ugain, deg a phedwar ugain, cant.

Mixed languages

• Bungee language, a Métis mix of Scottish Gaelic, Cree and other languages.
• Shelta, a mix of the Irish, English and Romany languages.
• Some forms of Romany language in Wales, also combined Romany itself with Welsh language and English language forms.