Iolite is a transparent gem-quality form of cordierite, a magnesium iron aluminum cyclosilicate mineral. Although the mineral has a history that dates back hundreds of years, the actual gemstone 'iolite' is considered to be relatively new and lesser-known. Cordierite was officially named after the French geologist, Pierre Louis Antoine Cordier (1777-1861) in 1813. The first significant and exciting discovery of large transparent, gem-quality deposits of iolite was made in 1996 in Palmer Creek, Wyoming (USA) by the American geologist, W. Dan Hausal. The world's largest iolite crystal was discovered south of Palmer Creek, in Grizzly Creek, Wyoming. This record-breaking crystal weighs over 24,000 carats.

The name 'iolite' originates from the Greek word 'ios' meaning 'violet'. Iolite's strong pleochroism earned it the misleading trade name of 'water-sapphire', a name now obsolete. From one direction, iolite can appear sapphire-like blue and from another, it can appear as clear as water. Furthermore, from the top view down, it can appear light golden or honey-yellow in colour. 'Dichroite' is another synonym for iolite in reference to its pleochroic ability; 'dichroite' is a Greek word which loosely translates as 'two-coloured rock'. Iolite is also known as 'the Viking stone' because according to Norse legend, Vikings used iolite as a polarizing filter to help them find the sun on cloudy days. It is believed that the Vikings discovered iolite deposits throughout Norway and Greenland.