The invaders' Germanic language displaced the indigenous Brythonic languages of what became England. The Celtic languages remained in Scotland, Wales and Cornwall. The dialects spoken by the Anglo-Saxons formed what is now called Old English. Later, it was strongly influenced by the North Germanic language Norse, spoken by the Vikings who invaded and settled mainly in the northeast of England (see Jórvík and Danelaw). The new and the earlier settlers spoke languages from different branches of the Germanic family; many of their lexical roots were the same or similar, although their grammars were more distinct, including the prefix, suffix and inflection patterns for many of their words. The Germanic language of these Old English speaking inhabitants of Britain was influenced by contact with Norse invaders, which might have been responsible for some of the morphological simplification of Old English, including loss of grammatical gender and explicitly marked case (with the notable exception of the pronouns). The most famous surviving work from the Old English period is a fragment of the epic poem "Beowulf", by an unknown poet, though substantially modified, likely by one or more Christian clerics long after its composition.
The period when England was ruled by Anglo-Saxon kings, with the assistance of Anglo-Saxon clergy, was a period when the Old English language was alive and growing. Since it was used for legal, political, religious and other intellectual purposes, Old English coined new words from native Anglo-Saxon roots, rather than "borrowing" foreign words. (This point is made in a standard text, The History of the English Language, by Baugh.)
The introduction of Christianity added another wave of Latin and some Greek words.
The Old English period formally ended with the Norman conquest, when the language was influenced, to an even greater extent, by the Norman French-speaking Normans.
The use of Anglo-Saxon to describe a merging of Anglian and Saxon languages and cultures is a relatively modern development. According to Elizabeth I, from a historian named Camden, who seems to be the person most responsible for the term becoming well-known in modern times.", (Stumpers-L, Fri, 14 Dec 2001) "The first citation for the second definition of 'Anglo-Saxon', referring to early English language or a certain dialect thereof, comes during the reign of Source: Answers.com