P.-É. Lecoq de Boisbaudran (Lecoq de Boisbaudran, Paul-Émile) first found this element (1886) associated with holmium and other heavy rare earths; Georges Urbain later (1906) was able to prepare a reasonably pure fraction. Some important mineral sources of dysprosium are xenotime, fergusonite, gadolinite, euxenite, polycrase, and blomstrandine. It occurs also in the products of nuclear fission. Commercial separation is performed by ion-exchange methods. The metal has been prepared by thermoreduction of the anhydrous halides with alkali or alkaline-earth metals. Dysprosium metal at room temperature is crystallized in a hexagonal close-packed structure, below -168° C is ferromagnetic, and at very low temperatures is superconductive. The naturally occurring isotopes are all stable and have mass numbers 156, 158, 160, 161, 162, 163, and 164; the last four make up nearly 98 percent of natural dysprosium.

Chemically, dysprosium behaves as a typical trivalent rare earth and forms a series of pale yellow compounds in which its oxidation state is +3. The Dy³⁺ ion is strongly paramagnetic; this property has been harnessed to produce magnetic cooling to very low temperatures.