'Lune' was the Mannish equivalent of the Elvish name Lhûn, and so doubtless the river known as the 'Little Lune' also took its name from an older Elvish form. That older name is not recorded but, by comparison with similarly patterned place-names, we might conjecture something like Lhûn Bîn.

The use of 'lh' in the name Lhûn is a convention indicating that the initial 'l' sound is voiceless (whereas the sound would naturally be voiced by most English speakers). To illustrate, consider the subtle difference between the 'l' sounds in the words 'flow' and 'low' - for most speakers, the first will be voiceless, the second voiced. The use of 'lh' in the spelling does not indicate that there was any kind of 'h' sound in the pronunciation of the word.

The fact that the Blue river (Lhûn) flowed out of the Blue Mountains (Ered Luin) can scarcely be coincidence, and indeed the Blue Mountains are sometimes called the Mountains of Lune, using the usual Mannish version of the river's name. The relationship between the two names is not explained, but since Ered Luin were known by that name during the First Age (before any record of the river Lhûn existed) it seems that the mountains must have given their name to the river, rather than vice versa.