The origin of C is closely tied to the development of the Unix operating system, originally implemented in assembly language on a PDP-7 by Ritchie and Thompson, incorporating several ideas from colleagues. Eventually they decided to port the operating system to a PDP-11. The original PDP-11 version of Unix was developed in assembly language. The developers were considering to rewrite the system using the B language. However B's inability to take advantage of some of the PDP-11's features, notably byte addressability, led to the development of C.

The initial development of C occurred at AT&T Bell Labs between 1969 and 1973;[2] according to Ritchie, the most creative period occurred in 1972. At that year a great part of Unix was rewritten in C. By 1973, with the addition of struct types, the C language had become powerful enough that most of the Unix kernel was now in C. The new language was named "C" because its features were derived from "B", which according to Ken Thompson was a stripped-down version of the BCPL programming language.[12]

Unix was one of the first operating system kernels implemented in a language other than assembly. (Earlier instances include the Multics system (written in PL/I), and MCP (Master Control Program) for the Burroughs B5000 written in ALGOL in 1961.) Circa 1977, further changes to the language were made by Ritchie and Stephen C. Johnson to facilitate portability of the Unix operating system. Johnson's Portable C Compiler served as the basis for several implementations of C on new platforms.

Source: http://en.wikipedia.org/wiki/C_(programming_language)