Mother Goose on the Loose was created by Betsy Diamant-Cohen. In the early 1980s, she worked as a children's librarian in New Jersey and ran a variety of programs for children from birth to age three. These often included the recitation of nursery rhymes with accompanying flannel board characters as well as knee bounces and foot-patting games.

After studying with Barbara Cass-Beggs in Israel in the late 1980s, Betsy restructured the program to incorporate the "Listen, Like, Learn" approach. She added many songs written or adapted by Cass-Beggs and redesigned the program to follow the format of a Cass-Beggs "Your Baby Needs Music" class. The result was Mother Goose on the Loose.