Arlo has many possible derivations along with its Irish and English roots. It may be a shortened form of the Italian name Carlo or the Spanish Carlos, and in Basque-speaking regions it is the word for area. In English, Arlo was used as a place name, Arlo Hill, by Edmund Spenser in his epic poem The Faerie Queene and is thought to derive from the Celtic word Aherlow, meaning “between two highlands.”

Arlo, an unexpectedly popular name for boys these days, is also finding new life as a girls' name. The first name Arlo may be rooted in the surname Arlow or the place name Aherlow, meaning "between two highlands". As a surname, it also has roots in a place name meaning "rocky hill".