The professor of Chemistry and Mineralogy of the Caroline Institute, in Stockholm, Carl Gustav Mossander showed, in 1843, that the oxide denominated yttria could be decomposed in three rare earths, which he called: yttria, a colorless oxide; erbia, a yellow earth; and terbia, a rosy earth. He separated these earths by fractional precipitation with hydroxide ammonia.

On the other hand, the professor of Chemistry, at the University of Geneva, Jean Charles Galissard of Marignac separated terbia from yttria, but changed the names of the oxides, calling terbia to the erbia of Mossander. This denomination is still valid today.

The terbia received its name in honor of the Swedish city of Ytterby.

The almost pure elementary substance was first prepared by G. Urbain, in 1905. The metal can be obtained by reduction of the terbium trifluoride with metallic calcium. Terbium is one of the rarest of the lanthanide series and therefore with very little commercial applications.