Davisson, who was born in Bloomington, Illinois, was educated at the University of Chicago and at Princeton, where he obtained his PhD in 1911. After working for a short period at the Carnegie Institute of Technology, Pittsburgh, Davisson joined the Bell Telephone Laboratory (then Western Electric) in 1917 and remained there until his retirement in 1946.

Davisson began his work by investigating the emission of electrons from a platinum oxide surface under bombardment by positive ions. He moved from this to studying the effect of electron bombardment on surfaces, and observed (1925) the angle of reflection could depend on crystal orientation. Following Louis de Broglie's theory of the wave nature of particles, he realized that his results could be due to diffraction of electrons by the pattern of atoms on the crystal surface.

In 1927 he performed a classic experiment with the American physicist Lester Germer (1896–1971) in which a beam of electrons of known momentum (p) was directed at an angle onto a nickel surface. The angles of reflected (diffracted) electrons were measured and the results were in agreement with de Broglie's equation for the electron wavelength (λ = h/p). In 1937 Davisson shared the Nobel Prize for physics with George Thomson for “their experimental discovery of the diffraction of electrons by crystals.”