Rarer than tin, thallium is concentrated in only a few minerals that have no commercial value. Trace amounts of thallium are present in sulfide ores of zinc and lead; in the roasting of these ores, the thallium becomes concentrated in the flue dusts, from which it is recovered.

Sir William Crookes (Crookes, Sir William) discovered (1861) thallium by observing the prominent green spectral line generated by selenium-bearing pyrites that had been used in the manufacture of sulfuric acid. Crookes and Claude-Auguste Lamy independently isolated (1862) thallium, showing it to be a metal.

Two crystalline forms of the element are known: close-packed hexagonal below about 230° C and body-centred cubic above. Natural thallium, the heaviest of the boron group elements, consists almost entirely of a mixture of two stable isotopes: thallium-203 (29.50 percent) and thallium-205 (70.50 percent). Traces of several short-lived isotopes occur as decay products in the three natural radioactive disintegration series: thallium-206 and thallium-210 (uranium series), thallium-208 (thorium series), and thallium-207 (actinium series).

Thallium metal has no commercial use, and thallium compounds have no major commercial application, since thallous sulfate was largely replaced in the 1960s as a rodenticide and insecticide. Thallous compounds have a few limited uses. For example, mixed bromide-iodide crystals (TlBr and TlI) that transmit infrared light have been fabricated into lenses, windows, and prisms for infrared optical systems. The sulfide (Tl₂S) has been employed as the essential component in a highly sensitive photoelectric cell and the oxysulfide in an infrared-sensitive photocell (thallofide cell). Also, the oxide (Tl₂O) has been utilized as an ingredient in highly refractive optical glasses and as a colouring agent in artificial gems. Alkali halide crystals, such as sodium iodide, have been doped or activated by thallium compounds to produce inorganic phosphors for use in scintillation counters to detect radiation.

Thallium imparts a brilliant green coloration to a bunsen flame. Thallous chromate, formula Tl₂CrO₄, is best used in the quantitative analysis of thallium, after any thallic ion, Tl³⁺, present in the sample has been reduced to the thallous state, Tl⁺.

Thallium is typical of the Group 13 elements in having an s²p¹ outer electron configuration. Promoting an electron from an s to a p orbital allows the element to be three or four covalent. With thallium, however, the energy required for s → p promotion is high relative to the Tl–X covalent bond energy that is regained on formation of TlX₃; hence, a derivative with a +3 oxidation state is not a very energetically favoured reaction product. Thus, thallium, unlike the other boron group elements, predominantly forms singly charged thallium salts having thallium in the +1 rather than the +3 oxidation state (the 6s² electrons remain unused). It is the only element to form a stable singly charged cation with the outer electron configuration (n-1)d¹⁰ns², which is, unusually enough, not an inert gas configuration. In water the colourless, more stable thallous ion, Tl⁺, resembles the heavier alkali metal ions and silver; the compounds of thallium in its +3 state are easily reduced to compounds of the metal in its +1 state.

In its oxidation state of +3, thallium resembles aluminum, although the ion Tl³⁺ appears to be too large to form alums. The very close similarity in size of the singly charged thallium ion, Tl⁺, and the rubidium ion, Rb⁺, makes many Ti⁺ salts, such as the chromate, sulfate, nitrate, and halides, isomorphous (i.e., have an identical crystal structure) to the corresponding rubidium salts; also the ion Tl⁺ is able to replace the ion Rb⁺ in the alums. Thus, thallium does form an alum; but in doing so it replaces the M⁺ ion, rather than the expected metal atom M³⁺, in the formula M⁺M³⁺(SO₄)₂ · 12H₂O.

Soluble thallium compounds are toxic. The metal itself is changed to such compounds by contact with moist air or skin. Thallium poisoning, which may be fatal, causes nervous and gastrointestinal disorders and rapid loss of hair.