The Navajo name Tsé Bitʼaʼí, "rock with wings" or "winged rock", for the peak refers to the legend of the great bird that brought them from the north to their present lands. The name "Shiprock" or Shiprock Peak or Ship Rock derives from the peak's resemblance to an enormous 19th-century clipper ship. United States Geological Survey maps indicate that the name "Ship Rock" dates from the 1870s.

The peak and surrounding land are of great religious and historical significance to the Navajo people. It is mentioned in many Navajo myths and legends. Foremost is the peak's role as the agent that brought the Navajo to the southwest. According to one legend, after being transported from another place, the Navajos lived on the monolith, "coming down only to plant their fields and get water." One day, the peak was struck by lightning, obliterating the trail and leaving only a sheer cliff, and stranding the women and children on top to starve. The presence of people on the peak is forbidden "for fear they might stir up the chį́įdii (ghosts), or rob their corpses."

In a legend that puts the peak in a larger geographic context, Shiprock is said to be either a medicine pouch or a bow carried by the "Goods of Value Mountain", a large mythic male figure comprising several mountain features throughout the region. The Chuska Mountains comprise the body, Chuska Peak is the head, the Carrizo Mountains are the legs, and Beautiful Mountain is the feet.

One legend has it that Bird Monsters (Tsé Ninájálééh) nested on the peak and fed on human flesh. In one version, after Monster Slayer destroyed Déélééd at Red Mesa, he killed two adult Bird Monsters at Shiprock and changed two young ones into an eagle and an owl. (In another version, the Warrior Twins were summoned to rid the Navajo of the Bird Monsters.)

The peak is mentioned in stories from the Enemy Side Ceremony and the Navajo Mountain Chant. It is associated with the Bead Chant and the Naayee'ee Ceremony.

The climbing of Shiprock has been illegal since 1970. In spite of this, rock climbers continue to see Shiprock as an interesting place to climb. According to reports from the Navajo Parks and Recreation Department, which administers recreational activities on Navajo land, there have been false claims that the department allows rock climbing and cooperates with rock climbing organizations. A 2006 press release addressing Monument Valley, another area of monoliths within the Navajo Nation, states:

Reports of the Navajo Parks and Recreation Department allowing rock climbing are false. Yet several websites have postings on how to evade Navajo Nation regulations and proceed with dangerous and illegal rock climbs in [Monument Valley]. Even more serious than the possible physical harm illegal climbs could pose is the religious damage done to the Navajo people by these non-Navajo visitors. The Monuments are sacred to the Navajo people and any human interaction (by Navajo or non-Navajo) is strictly off limits. Please abide by the humble religious requests of the Navajo people and do not climb the Monuments. Navajo law will be strictly enforced on this issue.