Modern chemistry can trace its birth to the large-scale production of alkalis and alkaline salts of potassium and sodium in the late 1700s. These compounds were used to make soap, glass, and textile bleaches, and they were therefore in tremendous demand. The crude, inefficient procedures by which they were made could not satisfy their ever-increasing use. In 1789, Nicolas Leblanc, a French surgeon, invented a synthetic process for converting common salt into soda ash, using sulfuric acid, limestone, and charcoal. Leblanc's method led to great advances in industrial processing. English industrialists spent much time, money, and effort to improve his manufacturing process, leading to large-scale production and increased industrial use.

In 1872, the chemical industry was revolutionized by the introduction of the more efficient, less costly Solvay process for making alkalis, which replaced the Leblanc process. Continuing developments and manufacturing improvements found new ways to economically produce ammonia, sodium hydroxide, chlorine, and other industrial chemicals in large quantities.

During World War I, the British blockades prevented valuable chemicals produced only in Germany from reaching America. This provided the impetus for the development of the organic chemical industry in the United States. The U.S. government assured the uninterrupted services of its chemists and chemical engineers by deferring them from military service to help create materials necessary for the war effort. Different branches of America's chemical industry began cooperating instead of competing. This cooperation led to the construction of ammonia plants to produce explosives and fertilizers.

The importance of rubber in warfare was determined in World War I. The Germans, who had been cut off from foreign rubber sources by the British blockade, ran out of tires for their trucks and rubber boots for their troops. In an effort to circumvent this situation, the German chemical industry tried to make synthetic rubber. However, it could never produce enough to satisfy its needs. In 1941, when Japan attacked Pearl Harbor, America suddenly found itself in the same position as the Germans had 27 years before. However, with government assistance, the U.S. chemical industry was able to make enough synthetic rubber to satisfy American war needs.

Nylon, discovered by Wallace Carothers at DuPont in 1927, reached the market in 1939. It was initially used for women's hosiery, dresses, and undergarments. With the onset of war, nylon was manufactured solely for parachutes. Another petrochemical, polyethylene, was in great demand for insulation in radar and other electrical equipment. New developments in catalysis in 1940 enabled the American petroleum industry to produce ultrahigh octane gasoline for tanks and aircraft and toluene for TNT manufacture.

From 1945 to 1980, the chemical industry enjoyed substantial growth. But the early 1980s witnessed the most severe decline in world sales since the Great Depression of the 1930s. Although companies had developed new, more efficient production methods, skyrocketing petroleum prices greatly reduced world demand for basic chemicals. In order to compete more effectively, many chemical firms spent heavily on expansion and research and development. Though these maneuvers were somewhat successful, foreign competition has continued to restrict sales. Despite the fact that U.S. industry is still dominant, its share of the global market has diminished. Its leading status is partially due to its vast domestic sources of coal, sulfur, phosphate rock, petroleum, forests, croplands, and water. Important problems still confront U.S. chemical industries: the development of alternate sources of energy, elimination of environmental pollution, and improvement of the safety of existing chemical products. Nanotechnology, the study of controlling matter at its most fundamental atomic level, is positioned to redefine the chemical manufacturing process, but it also requires massive amounts of costly research and development.

Another development that impacted the chemical industry occurred in the 21st century: the green chemistry movement. This took place when the U.S. chemical industry, responding to consumer concerns, worked to develop more environmentally friendly products and reduce its impact on the environment. According to the American Chemical Society, green chemistry is the design, development, and implementation of chemical products and processes that reduce or eliminate the use of chemicals that are hazardous to human health and the environment.