Conceived in 1937, the machine was built by Iowa State College mathematics and physics professor John Vincent Atanasoff with the help of graduate student Clifford Berry. It was designed only to solve systems of linear equations and was successfully tested in 1942. However, its intermediate result storage mechanism, a paper card writer/reader, was not perfected, and when John Vincent Atanasoff left Iowa State College for World War II assignments, work on the machine was discontinued. The ABC pioneered important elements of modern computing, including binary arithmetic and electronic switching elements,  but its special-purpose nature and lack of a changeable, stored program distinguish it from modern computers. The computer was designated an IEEE Milestone in 1990.
Atanasoff and Berry's computer work was not widely known until it was rediscovered in the 1960s, amidst conflicting claims about the first instance of an electronic computer. At that time ENIAC, that had been created by John Mauchly and J. Presper Eckert, was considered to be the first computer in the modern sense, but in 1973 a U.S. District Court invalidated the ENIAC patent and concluded that the ENIAC inventors had derived the subject matter of the electronic digital computer from Atanasoff (see Patent dispute). When, in the mid-1970s, the secrecy surrounding the British World War II development of the Colossus computers that pre-dated ENIAC, was lifted and Colossus was described at a conference in Los Alamos, New Mexico in June 1976, John Mauchly and Konrad Zuse were reported to have been astonished.
According to Atanasoff's account, several key principles of the Atanasoff–Berry Computer were conceived in a sudden insight after a long nighttime drive to Rock Island, Illinois, during the winter of 1937–38. The ABC innovations included electronic computation, binary arithmetic, parallel processing, regenerative capacitor memory, and a separation of memory and computing functions. The mechanical and logic design was worked out by Atanasoff over the next year. A grant application to build a proof of concept prototype was submitted in March 1939 to the Agronomy department which was also interested in speeding up computation for economic and research analysis. $5,000 of further funding (equivalent to $88,000 in 2017) to complete the machine came from the nonprofit Research Corporation of New York City.
The ABC was built by Atanasoff and Berry in the basement of the physics building at Iowa State College during 1939–42. The initial funds were released in September, and the 11-tube prototype was first demonstrated in October 1939. A December demonstration prompted a grant for construction of the full-scale machine. The ABC was built and tested over the next two years. A January 15, 1941 story in the Des Moines Register announced the ABC as "an electrical computing machine" with more than 300 vacuum tubes that would "compute complicated algebraic equations" (but gave no precise technical description of the computer). The system weighed more than seven hundred pounds (320 kg). It contained approximately 1-mile (1.6 km) of wire, 280 dual-triode vacuum tubes, 31 thyratrons, and was about the size of a desk.
It was not a Turing complete computer, which distinguishes it from more general machines, like contemporary Konrad Zuse's Z3 (1941), or later machines like the 1946 ENIAC, the 1949 EDVAC, the University of Manchester designs, or Alan Turing's post-War design of ACE at NPL and elsewhere. Nor did it implement the stored program architecture that made practical fully general-purpose, reprogrammable computers.
The machine was, however, the first to implement three critical ideas that are still part of every modern computer:
The memory of the Atanasoff–Berry Computer was a system called regenerative capacitor memory, which consisted of a pair of drums, each containing 1600 capacitors that rotated on a common shaft once per second. The capacitors on each drum were organized into 32 "bands" of 50 (30 active bands and two spares in case a capacitor failed), giving the machine a speed of 30 additions/subtractions per second. Data was represented as 50-bit binary fixed-point numbers. The electronics of the memory and arithmetic units could store and operate on 60 such numbers at a time (3000 bits).