Many people refer to the five-cent coin as a nickel, but that was not always the case, as the first five-cent coin was made of silver. Then, all coins had to be made of gold, silver, or copper by law. This silver five-cent coin was called a "half disme" (pronounced like "dime"), and was much smaller than today's nickel. Congress decided to have the United States Mint produce a new five-cent coin, made of nickel and copper, in 1866...but the silver half disme was still made until 1873. So both sizes were circulating at the same time for several years.

The new five-cent coin was larger than the silver half disme because nickel was less expensive than silver. This larger nickel was much easier to handle than the previous diminutive silver half disme.

President Thomas Jefferson took his place on obverse of the nickel in 1938 with Monticello, Jefferson's Virginia home, on the reverse. These obverse and reverse designs, both by Felix Schlag, were produced until 2003. In 2004, the United States Mint began to commemorate the bicentennials of the Louisiana Purchase and the Lewis and Clark Expedition with the Westward Journey Nickel Series™.

Since 2006, the image on the front of the nickel is the Thomas Jefferson likeness, based on a Rembrandt Peale portrait completed in 1800. The portrait showed Jefferson as Vice President at 57 years of age. This painting was the basis for most of the images of Jefferson that were made during his lifetime. The cursive "Liberty" inscription, modeled after Jefferson’s own handwriting, debuted on the 2005 nickels. This was designed by The United States Mint's Artistic Infusion Program Master Designer Jamie Franki of Concord, North Carolina. It was engraved by Sculptor-Engraver Donna Weaver.

The reverse of the current nickel features the classic rendition of Monticello originally executed by artist Felix Schlag, however, the design is crisper than ever before. United States Mint engraver John Mercanti restored the original image with greater detail and relief in the dome, the balconies, and the door and windows.