[T]hat small character was once the 27th part of the alphabet. Where did it come from though?

The shape of the character (&) predates the word ampersand by more than 1,500 years. In the first century, Roman scribes wrote in cursive, so when they wrote the Latin word et which means “and” they linked the e and t. Over time the combined letters came to signify the word “and” in English as well.

The word “ampersand” came many years later when “&” was actually part of the English alphabet. In the early 1800s, school children reciting their ABCs concluded the alphabet with the &. It would have been confusing to say “X, Y, Z, and”. Rather, the students said, “and per se and.”

“Per se” means “by itself”, so the students were essentially saying, “X, Y, Z, and by itself and.” Over time, “and per se and” was slurred together into the word we use today: ampersand.

Via Dictionary.com.