1. CUTE AS A BUTTON - "cute, charming, attractive, almost always with the connotation of being small, 1868 (from the original 1731 English meaning of 'acute' or clever). Cute as a bug's ear, 1930; cute as a bug in a rug, 1942; cute as a button, 1946. Cute and keen were two of the most overused slang words of the late 1920s and 1930s.
2. Cute as a button isn't the original phrase. The word cute is derived from the 1731 English meaning of the word acute, bright or clever. So being as acute as a button makes more sense as it's referring to the shine of polished brass buttons that make them stand out from others... more commonly known as "as bright as a button"; but seeing as this phrase derived from "as acute as a button" (where acute meant clever in 1731) it's easy to see how people mistook it for cute and so the phrase was redirected at cute little things and the meaning of cute was changed over the years... so yes, it came from acute as a button, which mean bright as a button, which has the obvious origins in shiny brass buttons that stood out from the dark coats that the queens men used to wear.
I like this guy's answer.....
Apparently, nobody knows really where the phrase originated, but we can come to a sort of conclusion about its meaning. According to several online dictionaries, the phrase “Cute as a button” is used how it is because of the size of a button. When people are talking about a cute dog, they’re not usually referring to a Great Dane. They’re usually referring to something small, which is virtually part of the definition of ‘cute’. Since small things are cute, and buttons are small, I guess you could say that buttons are cute.
As far as whether or not it’s a compliment, it depends entirely on context. Generally if you’re a male, and someone tells you you’re Cute as a button, then you may wanna think about taking up weight training. No guy ever wants to be cute as a button. But to girls, I think it’s probably a compliment… most of the time. There’s those times when they’re in one of “those moods” and I’m sure some girls could turn that around and say “A BUTTON?!? Buttons are ROUND! Are you calling me FAT?!?!?”So there you have it.... I still probably won't use the phrase even though I now kinda know where the phrase came from. Anyone have anything to add???