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/bi:t/ (B) A component in the machine data hierarchy larger than a bit and usually smaller than a word; now nearly always eight bits and the smallest addressable unit of storage. A byte typically holds one character.
A byte may be 9 bits on 36-bit computers. Some older architectures used "byte" for quantities of 6 or 7 bits, and the PDP-10 and IBM 7030 supported "bytes" that were actually bit-fields of 1 to 36 (or 64) bits! These usages are now obsolete, and even 9-bit bytes have become rare in the general trend toward power-of-2 word sizes.
The term was coined by Werner Buchholz in 1956 during the early design phase for the IBM Stretch computer. It was a mutation of the word "bite" intended to avoid confusion with "bit". In 1962 he described it as "a group of bits used to encode a character, or the number of bits transmitted in parallel to and from input-output units". The move to an 8-bit byte happened in late 1956, and this size was later adopted and promulgated as a standard by the System/360 operating system (announced April 1964).
James S. Jones <firstname.lastname@example.org> adds:
I am sure I read in a mid-1970's brochure by IBM that outlined the history of computers that BYTE was an acronym that stood for "Bit asYnchronous Transmission E..?" which related to width of the bus between the Stretch CPU and its CRT-memory (prior to Core).
Terry Carr <email@example.com> says:
In the early days IBM taught that a series of bits transferred together (like so many yoked oxen) formed a Binary Yoked Transfer Element (BYTE).
[True origin? First 8-bit byte architecture?]
See also nibble, octet.