Precious opal shows a variable interplay of internal colors and does have an internal structure. At the micro scale precious opal is composed of silica spheres some 150 to 300 nm in diameter in a hexagonal or cubic closed-packed lattice. These ordered silica spheres produce the internal colors by causing the interference and diffraction of light passing through the microstructure of opal (Klein and Hurlbut, 1985, p. 444). It is the regularity of the sizes of the spheres, and of 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. Visible light of diffracted wavelengths cannot pass through large thicknesses of the opal. This is the basis of the optical band gap in a photonic crystal, of which opal is the best known natural example.

In addition, micro fractures may be filled with secondary silica and form thin lamellae inside the opal during solidification. The term opalescence is commonly and erroneously used to describe this unique and beautiful phenomenon, which is correctly termed play of color. Contrarily, opalescence is correctly applied to the milky, turbid appearance of common or potch opal. Potch does not show a play of color.

The veins of opal displaying the play of color are often quite thin, and this has given rise to unusual methods of preparing the stone as a gem. An opal doublet is a thin layer of colorful material, backed by a black mineral, such as ironstone, basalt or obsidian. The darker backing emphasizes the play of color, and results in a more attractive display than a lighter potch. Given the texture of opals, they can be quite difficult to polish to a reasonable luster. The triplet cut backs the colored material with a dark backing, and then has a cap of clear quartz (rock crystal) on top, which takes a high polish, and acts as a protective layer for the comparatively delicate opal.

Besides the gemstone varieties that show a play of color, there are other kinds of common opal such as the milk opal, milky bluish to greenish (which can sometimes be of gemstone quality); resin opal, honey-yellow with a resinous luster; wood opal, caused by the replacement of the organic material in wood with opal; menilite brown or grey; hyalite, a colorless glass-clear opal sometimes called Muller's Glass; geyserite, (siliceous sinter) deposited around hot springs or geysers; and diatomite or diatomaceous earth, the accumulations of diatom shells or tests.

Fire opal, or Girasol, is a translucent to semi-opaque stone that is generally yellow to bright orange and sometimes nearly red and displays pleochroism at certain angles. 
Peruvian opal (also called blue opal) is a semi-opaque to opaque blue-green stone found in Peru which is often cut to include the matrix in the more opaque stones. It does not display pleochroism.

Until the nineteenth century the only source of precious opal known to Europeans was the mining district of Červenica in Slovakia.

Opal without play of color is very common and can be found all over the world, unlike precious opal deposits that are in greater scope found today only in Australia, U.S. and Mexico.

Australia produces around 97% of the world’s opal. 90% is called ‘light opal’ or white and crystal opal. White makes up 60% but not all the opal fields produce white opal; Crystal opal or pure hydrated silica makes up 30%; 8% is black and only 2% is boulder opal.

The town of Coober Pedy in South Australia is a major source of opal. Another Australian town, Lightning Ridge in New South Wales, is the main source of black opal, opal containing a predominantly dark background (dark-gray to blue-black displaying the play of color). Boulder opal consists of concretions and fracture fillings in a dark siliceous ironstone matrix. It is found sporadically in western Queensland, from Kynuna in the north, to Yowah and Koroit in the south.

Fire opal is found mostly in Mexico and Mesoamerica. In South America, a city called Pedro II, located in Brazil, produces opal that was discovered in 1930. In Honduras there was also some fine black opal mined from volcanic ash deposits. This opal is known for its stability.

The Virgin Valley Opal Fields Of Humboldt County in Northern Nevada produce a wide variety black, crystal, white, and fire opal. The Fire Opal mined from this locality is designated as the official gemstone of the State of Nevada. Most precious opals are wood replacements. Many specimens have a high water content, and as a result, have a greater tendency to desiccate and crack than most precious opal. Discovered in 1904 the mines are still producing gem materials in large amounts to hundreds of seasonal visitors. Three Fee Dig Mines provide the general public an opportunity to dig the gems themselves. The largest black opal in the Smithsonian Museum, possibly worth in excess of $1 million, comes from the Royal Peacock Opal Mine in the Virgin Valley.

Another source of white base opal in the United States is Spencer, Idaho. A high percentage of the opal found there occurs in thin layers. As a result, most of the production goes into the making of doublets and triplets.

Other significant deposits of precious opal around the world can be found in the Czech Republic, Slovakia, Hungary, Turkey, Indonesia, Brazil, Honduras, Guatemala, Nicaragua and Ethiopia.

As well as occurring naturally, opals of all varieties have been synthesized experimentally and commercially. The discovery of the ordered sphere structure of precious opal led to its synthesis by Pierre Gilson in 1974 (Klein and Hurlbut, 1985, p.528). The resulting material is distinguishable from natural opal by its regularity; under magnification, the patches of color are seen to be arranged in a "lizard skin" or "chicken wire" pattern. Synthetics are further distinguished from naturals by the formers lack of fluorescence under UV light. Synthetics are also generally lower in density and are often highly porous; some may even stick to the tongue.

Two notable producers of synthetic opal are the companies Kyocera and Inamori of Japan. Most so-called synthetics, however, are more correctly termed imitations, as they contain substances not found in natural opal (e.g., plastic stabilizers). The imitation opals seen in vintage jewelry are often "Slocum Stone" consisting of laminated glass with bits of foil interspersed.

The Hamamatsu Photonics Group will utilize the International Space Station's Japanese Experiment Module in 2006 to grow perfect crystalline opals in microgravity over four months, as compared with five million years for naturals. Such opals will be the object of study and elements for optical filters, displays, and data storage

In the middle ages, opal was considered a stone that could provide great luck because it was believed to possess all the virtues of each gemstone whose color was represented in the color spectrum of the opal.  Even under the last czar at the beginning of the 20th century, it was believed that when a Russian of any sex, of any rank, saw an opal, amongst other goods offered for sale, he or she would not buy anything more, since, in the judgment of subjects of the czar, the opal embodied the evil eye.

The opal is the official gemstone of South Australia and the Commonwealth of Australia, and the country's women's national team in basketball is nicknamed The Opals.

The official state gem stone for Nevada is precious black Fire Opal, in recognition of the black opal found in Virgin Valley, Humboldt County, Nevada.