In 1974 Gregory met Theodore Holm (Ted) Nelson, the author of Computer Lib/Dream Machines, and the thinker who coined the term "hypertext".
In 1979 Nelson convinced Gregory to move from Michigan and join him in Swarthmore, Pennsylvania, the small, sleepy college town outside of Philadelphia where Nelson earned his undergraduate degree, and first conceived the concept of a hypertext.
Gregory's first summer in Swarthmore, characterized by Xanadu insiders as the "Swarthmore Summer", was a productive time, where Nelson and Gregory enjoyed the collaboration of other volunteers, including Stuart Greene and Mark S. Miller.
In 1988 Nelson, Gregory, and other members of their team, all moved to Sausalito, California, when Autodesk, a manufacturer of Computer aided design software, purchased a controlling interest in the Xanadu Project.
[5] Later, as founder, CEO, CTO and Chairman of the Board of Xanadu Operating Company, Gregory led design and development of a hypertext technology that includes quotable documents with version control, fine-grained, bidirectional links, the ability to track intellectual property rights, and a mechanism to pay royalties.