The term Generation X has been used in demography, the social sciences, and marketing, though it is most often used in popular culture.

The term Generation X was coined by the Magnum photographer Robert Capa in the early 1950s. He would use it later as a title for a photo-essay about young men and women growing up after the war. The project first appeared in "Picture Post" (UK) and "Holiday" (USA) in 1953. Describing his intention, Capa said 'We named this unknown generation, The Generation X, and even in our first enthusiasm we realised that we had something far bigger than our talents and pockets could cope with'. The term was then used in a 1964 study of British youth by Jane Deverson. Deverson was asked by Woman's Own magazine to interview teenagers of the time. The study revealed a generation of teenagers who "sleep together before they are married, were not taught to believe in God as 'much', dislike the Queen, and don't respect parents." Because of these controversial findings, the piece was deemed unsuitable for the magazine; Deverson, in an attempt to save her research, worked with Hollywood correspondent Charles Hamblett to create a book about the study. Hamblett decided to name it Generation X.

The term was popularized by Canadian author Douglas Coupland's 1991 novel, Generation X: Tales for an Accelerated Culture, concerning young adults during the late 1980s and their lifestyles. While Coupland's book helped to popularize the phrase "Generation X," in a 1989 magazine article he erroneously attributed the term to English musician Billy Idol. In fact, Idol had been a member of the punk band Generation X from 1976–1981, which was named after Deverson and Hamblett's 1965 sociology book—a copy of which was owned by Idol's mother.

In the U.S. Generation X was originally referred to as the "baby bust" generation because of the drop in the birth rate following the baby boom.

In the 1991 book Generations, William Strauss and Neil Howe call this generation the "13th Generation" and define the birth years as 1961 to 1981. 1970, the approximate mid-point of the "13th Generation", had the lowest birth rate of this period.

According to the authors, Generation X is "the 13th generation" to be familiar with the flag of the United States (counting back to the peers of Benjamin Franklin). The label was also chosen because they consider it a "Reactive" or "Nomad" generation, composed of those who were children during a spiritual awakening.

Older generations generally have negative perceptions of Reactive generations—whose members tend to be pragmatic and perceptive, savvy but amoral, more focused on money than on art -- and the use of 13 is also intended to associate this perception with the negative connotations of that number.

The authors highlight this negative perception by noting the popularity of "devil-child" movies, wherein children are portrayed as malevolent protagonists (e.g. Rosemary's Baby), released soon after the generation's first members were born.

Individuals considered to be within Generation X were born, and grew up during the later years of, and in the decade following the Vietnam War. They are most often linked to the presidencies of Ronald Reagan and George H. W. Bush. Coming of age after the Vietnam War had ended, their political experiences and cultural perspective were shaped by the end of the cold war, the fall of the Berlin wall, and a series of US economic calamities such as the 1973 oil crisis, the 1979 energy crisis, the early 1980's recession, and the savings and loan crisis - instilling a sense of economic uncertainty and a reduced expectation of long term fidelity between employers and employees. Growing up in a historical span of relative geopolitical peace for the US, this generation saw the inception of the home computer, the rise of videogames, cable television and the Internet as a tool for social and commercial purposes. Other attributes identified with this demographic are peaks in U.S. urban decay, the Dot-com bubble, the New York City blackout of 1977, the Space Shuttle Challenger disaster, the Iran hostage crisis, the Iran-Contra Affair, Desert Storm, the rise and fall of disco, 1980's rock "hair bands" such as Motley Crue and Bon Jovi, new wave, techno and punk rock, gangsta rap, Heavy Metal, 1990's grunge/alternative rock bands such as Nirvana and Pearl Jam, and the hip hop culture. Along with early members of Generation Y, Generation Xers are sometimes referred to as the MTV Generation.

The members of Generation X are thought to be the first generation to be raised in an age of postmodernism. Understanding the transition from modernism to postmodernism is relevant in order to understand the perspective and modalities of this generation. Compared with previous generations, Generation X represents a more heterogeneous generation, exhibiting great variety. They are diverse in such aspects as race, class, religion, ethnicity, and sexual orientation.