The element tellurium was isolated before it was actually known to be an elemental species. About 1782 Franz Joseph Müller von Reichenstein, an Austrian mineralogist, worked with an ore referred to as German gold. From this ore he obtained a material that defied his attempts at analysis and was called by him metallum problematicum. In 1798 Martin Heinrich Klaproth confirmed Müller's observations and established the elemental nature of the substance. He named the element after man's “heavenly body” Tellus, or Earth.

The demand for tellurium does not match that for selenium. The two elements are found together in many ores; they may be isolated by employing the processes described in connection with selenium, obtaining solutions containing salts of both selenious and tellurous acids, H₂SeO₃ and H₂TeO₃. Upon treatment of these solutions with sulfuric acid, tellurium dioxide, TeO₂, separates because of its low solubility, while the selenious acid remains dissolved. The tellurium dioxide can be converted into elemental tellurium by treatment with sulfur dioxide; an electrolytic process is used to purify the product.

In tellurium, the covalent bonding necessary to provide large ring- and chain-molecules by catenation is almost nonexistent. The element crystallizes in the rhombohedral form. It is silvery white and isomorphous with gray selenium—that is, the structure and dimensions of the crystals are very similar. It is brittle but not very hard. The tellurium atoms form spiral chains in the crystal with Te–Te distances of 3.74 Å.

The element is a poor conductor of heat and only a fair conductor of electricity. Tellurium burns in air or in oxygen with a blue-green flame, forming the dioxide (TeO₂). It is unaffected by hydrochloric acid, but either nitric acid or aqua regia (a mixture of nitric acid and hydrochloric acid) oxidizes it to tellurous acid (H₂TeO₃). It reacts with the halogens (fluorine, chlorine, bromine, and iodine) to form halides, and it combines with most metals at elevated temperatures to form tellurides.

Although there are adequate supplies of the element, no single use has been developed that creates a large demand for it. Small amounts of tellurium increase the ductility of aluminum alloys, the hardness and tensile strength of tin alloys, and the machinability of stainless steel and copper; in lead and in manganese-magnesium alloys, it increases resistance to corrosion. Bismuth telluride and lead telluride are semiconducting materials that have been used in thermoelectric devices either as sources of electricity or for cooling purposes.