By 1900, it had become apparent that nuclear radiation consisted of at least two parts, alpha rays and beta rays. These two types of rays were bent in opposite directions by a magnetic field and had, therefore, to consist of charged particles. The two rays were eventually identified, respectively, as streams of doubly-charged helium ions and of electrons.

In 1900, a third type of radiation was identified by the French physicist Paul Ulrich Villard. Villard discovered that this third form of radiation was unaffected by a magnetic field and was even more energetic than beta rays. Whereas alpha rays are stopped by a few centimeters of air and beta rays by a few centimeters of aluminum, Villard's new rays could only be stopped by a relatively thick piece of lead.

These rays eventually came to be called gamma rays although the source of this name is not clear. Villard, Ernest Rutherford, and others, have been credited with suggesting the name.

The nature of gamma rays was a topic of considerable dispute. Some scientists thought that they were composed of very energetic particles, as was the case with alpha and beta rays. Others suggested that they were a form of electromagnetic wave, similar to x-rays.

The resolution of this dispute was provided in an experiment by Rutherford and Andrade in 1914. A crystal was used to diffract a beam of gamma rays. The angle of diffraction permitted calculation of the rays' wavelength. The values obtained turned out to be similar to those of very short x-rays. Gamma rays were, therefore, a form of electromagnetic radiation even more energetic than x-rays.

In actual fact, there is no discernable difference between high energy x-rays and low energy gamma rays. As a matter of convenience, the term x-rays is reserved for radiation that originates outside the atomic nucleus and gamma rays for radiation that originates within it.

Gamma rays are released during alpha and/or beta decay. The rays are apparently produced as a result of changes in nuclear energy levels, just as x-rays are liberated during changes in electron energy levels.