The first practical visible-spectrum (red) LED was developed in 1962 by Nick Holonyak Jr., while working at General Electric Company. He later moved to the University of Illinois at Urbana-Champaign.

Holonyak is seen as the "father of the light-emitting diode". M. George Craford, a former graduate student of Holonyak's, invented the first yellow LED and 10x brighter red and red-orange LEDs in 1972.

Shuji Nakamura of Nichia Corporation of Japan demonstrated the first high-brightness blue LED based on InGaN, borrowing on critical developments in GaN nucleation on sapphire substrates and the demonstration of p-type doping of GaN which were developed by I. Akasaki and H. Amano in Nagoya.

In 1995, Alberto Barbieri at the Cardiff University Laboratory (GB) investigated the efficiency and reliability of high-brightness LEDs demonstrating very high result by using a transparent contact made by indium tin oxide (ITO) on (AlGaInP/GaAs) LED.

The existence of the blue LED and high efficiency quickly carried to the first white LED, which employed a Y3Al5O12:Ce, or "YAG", phosphor coating to mix yellow (down-converted) light with blue to produce light that appears white. Nakamura was awarded the 2006 Millennium Technology Prize for his invention.

The development of LED technology has caused the efficiency and light output to increase exponentially, with a doubling approximately every 36 months since the 1960s, in a way similar to Moore's law.

The advances are generally attributed to the parallel development of other semiconductor technologies and advances in optics and material science. This trend is normally called Haitz's Law after Dr. Roland Haitz.