Opal is an amorphous form of silica related to quartz, a mineraloid form, not a mineral. 3% to 21% of the total weight is water, but the content is usually between 6% to 10%. It is deposited at a relatively low temperature and may occur in the fissures of almost any kind of rock, being most commonly found with limonite, sandstone, rhyolite, marl and basalt. Opal is the national gemstone of Australia, which produces 97% of the world's supply.

Opal's internal structure makes it diffract light; depending on the conditions in which it formed it can take on many colors. Opal ranges from clear through white, gray, red, orange, yellow, green, blue, magenta, rose, pink, slate, olive, brown, and black. Of these hues, the reds against black are the most rare, whereas white and greens are the most common. It varies in optical density from opaque to semi-transparent. For gemstone use, its natural color is often enhanced by placing thin layers of opal on a darker underlying stone, like basalt.

Precious opal shows a variable interplay of internal colors and even though it is a mineraloid, it has an internal structure. At micro scales precious opal is composed of silica spheres some 150 to 300 nm in diameter in a hexagonal or cubic close-packed lattice. These ordered silica spheres produce the internal colors by causing the interference and diffraction of light passing through the microstructure of the opal. It is the regularity of the sizes and the packing of these spheres that determines the quality of precious opal. Where the distance between the regularly packed planes of spheres is approximately half the wavelength of a component of visible light, the light of that wavelength may be subject to diffraction from the grating created by the stacked planes. The spacing between the planes and the orientation of planes with respect to the incident light determines the colors observed. The process can be described by Bragg's Law of diffraction.