Born in the Japanese city of Osaka, Esaki graduated in physics at the University of Tokyo in 1947, gaining his doctorate there in 1959. His doctoral work was on the physics of semiconductors, and in 1958 he reported an effect known as ‘tunneling’, which he had observed in narrow p–n junctions of germanium that were heavily doped with impurities. The phenomenon of tunneling is a quantum-mechanical effect in which an electron can penetrate a potential barrier through a narrow region of solid, where classical theory predicts it could not pass.

Esaki was quick to see the possibility of applying the tunnel effect, and in 1960 reported the construction of a device with diodelike properties – the tunnel (or Esaki) diode. With negative bias potential, the diode acts as a short circuit, while under certain conditions of forward bias it can have effectively negative resistance (the current decreasing with increasing voltage). Important characteristics of the tunnel diode are its very fast speed of operation, its small physical size, and its low power consumption. It has found application in many fields of electronics, principally in computers, microwave devices, and where low electronic noise is required. Esaki shared the Nobel Prize for physics in 1973 with Brian Josephson and Ivar Giaever.

Esaki worked for the computer firm International Business Machines at the Thomas J. Watson Research Center, Yorktown Heights, New York, until 1992, when he returned to Japan to become president of Tsukuba University, Ibaraki.