Holography dates from 1947, when the Hungarian-born British scientist Dennis Gabor (1900–1979) developed the theory of holography while working to improve electron microscopy. Gabor coined the term “hologram” from the Greek words holos, meaning whole, and gramma, meaning message. The 1971 Nobel prize in physics was awarded to Gabor for his invention of holography.

Further progress in the field was prevented during the following decade because the light sources available at the time were not truly coherent. This barrier was overcome in 1960, with the invention of the laser. In 1962 Emmett Leith and Juris Upatnieks of the University of Michigan recognized, from their work in side-looking radar, that holography could be used as a three-dimensional visual medium. They improved upon Gabor's original idea by using a laser and an off-axis technique. The result was the first laser transmission hologram of three-dimensional objects. The basic off-axis technique of Leith and Upatnieks is still the staple of holographic methodology. These transmission holograms produce images with clarity and realistic depth, but require laser light to view the holographic image.

The Russian physicist Uri Denisyuk combined holography with Lippmann's method of color photography. In 1962 Denisyuk's approach produced a white-light reflection hologram, which could be viewed in the light from an ordinary light bulb. In 1968 Stephen Benton, then at Polaroid corporation, invented white-light transmission holography. This type of hologram can be viewed in ordinary white light and is commonly known as the rainbow hologram.