In 1794, J. Gadolin discovered a new element in a heavy black mineral (gadolinite) which he had found near Ytterby, Sweden. He obtained about 38% of the new oxide from the mineral. This new oxide was called yttria. This same oxide was isolated from a number of other minerals, In 1842, C. G. Mosander found that this oxide was complex and that it could be resolved into three fractions - the most basic one, which he called yttria, the least basic one, erbia, and the intermediate one, terbia. All of these rare earth oxides were named after the town of Ytterby, Sweden, near where the first mineral was found. Yttria was white and gave colorless salts, erbia was orange-yellow and gave colorless salts, while terbia was white and gave rose-colored salts. Mosander's results were confirmed by several other chemists, but during this early period of rare-earth chemistry, the names erbia and terbia became confused so that Mosander's terbia became erbia after 1860 and his erbia was known as terbia after 1877. Mosander's intermediate fraction, now called erbia, was later shown to be complex and resolved into a mixture of five oxides: erbia, rose-colored; sacandia, white; holmia, tan; thulia, white; and ytterbia, white.

By 1905 G. Urbain and C. James had independently succeeded in isolating fairly pure erbia. The metallic form of the element was produced in a powdered form mixed with potassium chloride by W. Klemm and H. Bommer in 1934. They reduced the anhydrous chloride with potassium vapor.

During the late 1940's and early 1950's separation methods were developed which carried out these fractionation processes automatically. At the present time, a number of industries are using ion exchange techniques to prepare pure erbia, and it can be obtained in high purity in up to ton quantities if desired.