FM synthesis, a means of generating sounds via frequency modulation, was developed by John Chowning at Stanford University, California.

Yamaha licensed the technology to create the DX7, combining it with very-large-scale integration chips to lower manufacturing costs.

By the mid-20th century, frequency modulation (FM), a means of carrying sound, had been understood for decades and was widely used to broadcast radio transmissions.

[4] At the time, the Japanese company Yamaha was the world's largest manufacturer of musical instruments but had little market share in the United States.

"[4] Yamaha licensed the technology for one year to determine its commercial viability, and in 1973 its organ division began developing a prototype FM monophonic synthesizer.

[3] Ikutaro Kakehashi, the founder of the Japanese company Roland, was also interested, but met Chowning six months after Yamaha had agreed to the deal.

Kakehashi later said Yamaha were the natural partners in the venture, as they had the resources to make FM synthesis commercially viable.

[4] The first commercial FM synthesizer was the Yamaha GS1, released in 1980,[5] which was expensive to manufacture due to its integrated circuit chips.

[4] Yamaha also altered the implementation of the FM algorithms in the DX7 for efficiency and speed, producing a sampling rate higher than Stanford's synthesizers.

[6] In late 1982, Dave Bristow and Gary Leuenberger, experts on the Yamaha CS-80, flew to Japan to develop the DX7's voices.

[7] Yamaha manufactured units on a scale American competitors could not match; by comparison, Moog sold 12,000 Minimoog synthesizers in 11 years, and could not meet demand.

[20] MusicRadar described its interface as "nearly impenetrable", with "operators, algorithms and unusual envelopes ... accessed through tedious menus and a diminutive display".

[8] The "E PIANO 1" preset became particularly famous,[8][21] especially for power ballads,[22] and was used by artists including Whitney Houston, Chicago,[22] Phil Collins, Luther Vandross, Billy Ocean[8] and Celine Dion.

[26] The English musician Brian Eno learned to program the DX7 in depth and used it to create ambient music on his 1983 album Apollo: Atmospheres and Soundtracks.

[8] In later years, the DX sounds came to be seen as dated or clichéd, and interest in FM synthesis declined, with second-hand digital synthesizers selling for less than analog.