A tunnel diode or Esaki diode is a type of semiconductor diode that has effectively "negative resistance" due to the quantum mechanical effect called tunneling. It was invented in August 1957 by Leo Esaki and Yuriko Kurose when working at Tokyo Tsushin Kogyo, now known as Sony. In 1973, Esaki received the Nobel Prize in Physics for experimental demonstration of the electron tunneling effect in semiconductors. Robert Noyce independently devised the idea of a tunnel diode while working for William Shockley, but was discouraged from pursuing it. Tunnel diodes were first manufactured by Sony in 1957, followed by General Electric and other companies from about 1960, and are still made in low volume today.

Tunnel diodes have a heavily doped PN junction that is about 10 nm (100 Å) wide. The heavy doping results in a broken band gap, where conduction band electron states on the N-side are more or less aligned with valence band hole states on the P-side. They are usually made from germanium, but can also be made from gallium arsenide, gallium antimonide (GaSb) and silicon materials.

The negative differential resistance in part of their operating range allows them to function as oscillators and amplifiers, and in switching circuits using hysteresis. They are also used as frequency converters and detectors. Their low capacitance allows them to function at microwave frequencies, far above the range of ordinary diodes and transistors.

Due to their low output power, tunnel diodes are not widely used: Their radio frequency output is limited to a few hundred milliwatts due to their small voltage swing. In recent years, however, new devices that use the tunneling mechanism have been developed. The resonant-tunneling diode (RTD) has achieved some of the highest frequencies of any solid-state oscillator.

Another type of tunnel diode is a metal-insulator-insulator-metal (MIIM) diode, where an additional insulator layer allows "step tunneling" for more precise control of the diode. There is also a metal-insulator-metal (MIM) diode, but due to inherent sensitivities, its present application appears to be limited to research environments.

Under normal forward bias operation, as voltage begins to increase, electrons at first tunnel through the very narrow P-N junction barrier and fill electron states in the conduction band on the N-side which become aligned with empty valence band hole states on the P-side of the P-N junction. As voltage increases further, these states become increasingly misaligned, and the current drops. This is called negative differential resistance because current decreases with increasing voltage. As voltage increases beyond a fixed transition point, the diode begins to operate as a normal diode, where electrons travel by conduction across the P-N junction, and no longer by tunneling through the P–N junction barrier. The most important operating region for a tunnel diode is the "negative resistance" region. Its graph is different from a normal P-N junction diode.

When used in the reverse direction, tunnel diodes are called back diodes (or backward diodes) and can act as fast rectifiers with zero offset voltage and extreme linearity for power signals (they have an accurate square law characteristic in the reverse direction). Under reverse bias, filled states on the P-side become increasingly aligned with empty states on the N-side, and electrons now tunnel through the P-N junction barrier in reverse direction.

In a conventional semiconductor diode, conduction takes place while the P-N junction is forward biased and blocks current flow when the junction is reverse biased. This occurs up to a point known as the "reverse breakdown voltage" at which point conduction begins (often accompanied by destruction of the device). In the tunnel diode, the dopant concentrations in the P and N layers are increased to a level such that the reverse breakdown voltage becomes zero and the diode conducts in the reverse direction. However, when forward-biased, an effect occurs called quantum mechanical tunneling which gives rise to a region in its voltage vs. current behavior where an increase in forward voltage is accompanied by a decrease in forward current. This "negative resistance" region can be exploited in a solid state version of the dynatron oscillator which normally uses a tetrode thermionic valve (vacuum tube).