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After inventing dynamite, Swedish-born Alfred Nobel became a very rich man. However, he foresaw its universally destructive powers too late. Nobel preferred not to be remembered as the inventor of dynamite, so in 1895, just two weeks before his death·, he created a fund to be used for awarding prizes to people who had made worthwhile contributions to humanity. Originally there were five awards: literature, physics, chemistry, medicine, and peace. Economics was added in 1968, just sixty-seven years after the first awards ceremony.

Nobel's original legacy of nine million dollars was invested, and the interest on this sum is used for the awards which vary from $30,000 to $125,000. Every year on December 10, the anniversary of Nobel's death, the awards (gold medal, illuminated diploma, and money) are presented to the winners. Sometimes politics plays an important role in the judges' decisions. Americans have won numerous science awards, but relatively few literature prizes.

No awards were presented from 1940 to 1942 at the beginning of World War 11. Some people have won two prizes, but this is rare; others have shared their prizes.