I recall when they first came out they were used to send credit card numbers, etc. when you paid for things like repairs at a service station.
It seemed like * was the “Enter” key to end a numeric string, like the amount.
What was the # for? Seems obvious it would indicate the start of a number, but usually a script would only allow numbers at certain points, so I’m not sure when you would need it.
And was that the original intent?
I did a little looking around, and found this:
From here.
I forgot to add a few more links…
I don’t believe they weren’t originally intended for any specific application. When DTMF (dual tone multi-frequency) dialing came into existence, there were a couple leftover slots in the encoding[sup]1[/sup]. They recognized that it would be convenient for these to be available for data applications, though they wouldn’t be used in normal phone dialing. Bell Labs actually undertook a study to figure out what symbols should go on the buttons, and decided on * and #. How they decided to call the latter the “octothorpe” is another story. Sure enough, we’ve made use of them.
I see on preview that the “octothorpe” story has appeared, and a quote concerning the Bell Labs study. I’ll let this stand anyway.
[sup]1[/sup] - each touch-tone on your dial pad is a combination of two frequencies, one of three higher frequencies, and one of four lower frequencies. 4 times 3 gives you 12 combinations, so there’s two leftovers. Actually, there was also an A, B, C and D using a fourth high frequency. These were intended for the military “autovon” project, and did not appear on civilian phones. Background on DTFM:
Oh goody, I learned a new word—one that I’d never heard in over ten years of programming IVR (Interactive Voice Response) applications! I think I’ll go through the suite and change all the “. . . followed by the pound key” prompts to ". . . “followed by the octothorpe.” Then sit back to watch the fun.
On an ever-so-slightly more serious note, it’s my experience that whatever the origin of the keys in question, standard practice nowadays is to use the pound key to terminate a variable-length string of numbers (“Enter the amount, followed by the pound key”), and the star to cancel an operation or back up (“To return to the previous menu, press star”). I’ve seen more than a couple of IVR development tools, and that seems to be the default. If the input string has a fixed length, then the issue is moot—simply set the minimum and maximum lengths to the same value…
As a slightly connected question, why is the # symbol called “pound” in the US?
In the UK and Ireland, this symbol is called “hash” - I don’t know the origin of this, either, other than it looks a bit like hash browns.
Of course (until recently in Ireland’s case), the “pound” is the currency, and I’ve noticed on some keyboards, Mac ones in particular, that the £ and the # are both accessed from the “3” button. Is there some connection?
I believe it’s designation as “sharp” predates “hash” or “pound.”
Shorthand for the pound unit of weight (the baby weighed 8# 14oz). Where that came from I leave as an exercise for the etymologist.
Actually, “lb” (from the Latin libra) is probably more common; but the terminology remains.
A little digging on the subject reveals the true answer to be somewhat elusive.
When # precedes a numeric entry, it indicates number.
Ex: Your order for 500 #2 pencils weighs 25#. Clear as mud, eh? 
The pound symbol £ is probably on the 3 key more because it’s adjacent to the $ symbol; the fact that # means ‘pound’ in other contexts is probably just a convenient coincidence. Or maybe it’s not, and these characters were deliberately put close to each other on early typewriters.
The word ‘thorp’ means ‘village’ (cognate to German ‘dorf’) in Middle English. Hence ‘octothorp’ for the pound symbol means ‘eight villages’. Perhaps this refers to the eight points at the edge of the symbol, like a network of roads connecting eight villages, or eight fields surrounding a village. Most likely, though, any etymology is a wishful imposition on a word that was made up whimsically. One source says it was named for the athlete Jim Thorpe. A probably spurious derivation is that the name was invented by someone named John (or Charles) B. Octothorp. Octothorp is a Greek/English compound word, so it’s an unlikely surname. It’s known that the term was made up by someone at Bell Labs in the 60s.
In German, the ‘octothorp’ is called Lattenzaun ‘picket fence’, Dopplekreuz ‘double cross’ or Raute or Rautenzeichen ‘rhombus, rhombus sign’. The last is the official name used in the ‘please enter your password, followed by the pound sign’ sense.
The terms hash and hatch come from making marks or notches with an ax.
The hash marks on a soldier’s sleeve indicate rank.
Cross hatching is a lot of parallel lines at right angles to make shadows in a line drawing.
Hash browns are potatoes cut with hatches.
I’m pretty sure the symbol # was just an easy way to write lb with a line through it, customary for for pound.
“Thorp(e)” means that in Modern English, too! It might be archaic, but it’s still part of the language. Originally (in A/S) it meant a small farm.
If you are programming an automatic dialer, putting a ‘#’ on the end of the telephone number will speed up the processing of the call. It tells the switch that it has reached the end of the number and it can start setting up the call.