The Indian scholar Pingala (circa 5th-2nd century BC) developed advanced mathematical concepts for describing prosody, and in so doing presented the first known description of a binary numeral system. He used binary numbers in the form of short and long syllables (the latter equal in length to two short syllables), making it similar to Morse code.

A set of eight trigrams and a set of 64 hexagrams, analogous to the three-bit and six-bit binary numerals, were known in ancient China through the classic text I Ching. In the 11th century, scholar and philosopher Shao Yong developed a method for arranging the hexagrams which corresponds to the sequence 0 to 63, as represented in binary, with yin as 0, yang as 1 and the least significant bit on top. There is, however, no evidence that Shao understood binary computation; the ordering is also the lexicographical order on sextuples of elements chosen from a two-element set.

Similar sets of binary combinations have also been used in traditional African divination systems such as Ifá as well as in medieval Western geomancy. The base-2 system utilized in geomancy had long been widely applied in sub-Saharan Africa.

In 1605 Francis Bacon discussed a system whereby letters of the alphabet could be reduced to sequences of binary digits, which could then be encoded as scarcely visible variations in the font in any random text. Importantly for the general theory of binary encoding, he added that this method could be used with any objects at all: "provided those objects be capable of a twofold difference only; as by Bells, by Trumpets, by Lights and Torches, by the report of Muskets, and any instruments of like nature". (See Bacon's cipher.)

The modern binary number system was fully documented by Gottfried Leibniz in the 17th century in his article Explication de l'Arithmétique Binaire. Leibniz's system uses 0 and 1, like the modern binary numeral system. As a Sinophile, Leibniz was aware of the I Ching and noted with fascination how its hexagrams correspond to the binary numbers from 0 to 111111, and concluded that this mapping was evidence of major Chinese accomplishments in the sort of philosophical mathematics he admired.

In 1854, British mathematician George Boole published a landmark paper detailing an algebraic system of logic that would become known as Boolean algebra. His logical calculus was to become instrumental in the design of digital electronic circuitry.

In 1937, Claude Shannon produced his master's thesis at MIT that implemented Boolean algebra and binary arithmetic using electronic relays and switches for the first time in history. Entitled A Symbolic Analysis of Relay and Switching Circuits, Shannon's thesis essentially founded practical digital circuit design.

In November 1937, George Stibitz, then working at Bell Labs, completed a relay-based computer he dubbed the "Model K" (for "Kitchen", where he had assembled it), which calculated using binary addition. Bell Labs thus authorized a full research programme in late 1938 with Stibitz at the helm. Their Complex Number Computer, completed January 8, 1940, was able to calculate complex numbers. In a demonstration to the American Mathematical Society conference at Dartmouth College on September 11, 1940, Stibitz was able to send the Complex Number Calculator remote commands over telephone lines by a teletype. It was the first computing machine ever used remotely over a phone line. Some participants of the conference who witnessed the demonstration were John Von Neumann, John Mauchly and Norbert Wiener, who wrote about it in his memoirs.

A binary number can be represented by any sequence of bits (binary digits), which in turn may be represented by any mechanism capable of being in two mutually exclusive states. The following sequences of symbols could all be interpreted as the binary numeric value of 667:

The numeric value represented in each case is dependent upon the value assigned to each symbol. In a computer, the numeric values may be represented by two different voltages; on a magnetic disk, magnetic polarities may be used. A "positive", "yes", or "on" state is not necessarily equivalent to the numerical value of one; it depends on the architecture in use.