"blue dye-stuff obtained from certain lichens," early 14c., lit-mose, probably from an Old Norse word related to Norwegian dialectal litmose, from Old Norse lita "to dye, to stain" (from litr "color, dye;" see lit (n.1)) + mos "moss." Said to be also in part from Middle Dutch lijkmoes (Dutch lakmoes), from lac (see lac) + moes "pulp." Another idea [Watkins] connects the first element to Middle Dutch leken "to drip, leak" (see leak (v.)). The second element is in any case the common Germanic word for "moss, lichen" (see moss).
The dye is obtained from certain lichens. It is naturally blue but turns red in acid and is restored to blue by alkalis. Figurative use of litmus test is first attested 1957, from scientific use of litmus-treated paper as a chemical indicator. Litmus paper with this meaning is from 1803.