Until 1964, Australopithecus remains had been found in Africa, but remains of the oldest representative of the genus Homo had been recognized only in Asia. In that year, however, Louis Leakey, Phillip Tobias, and John Napier announced the new species Homo habilis, or "handy man". They had to redefine the genus to accommodate this oldest form.

The type specimen was a mandible, with associated postcranial bones, and a fragmentary cranial vault; Olduvai Hominid 7 (OH 7). They based their placement of OH 7 in Homo primarily on brain expansion. Until then, an arbitrary lower limit had been set between 700cc and 800cc as the cutoff for the genus Homo. With an estimated cranial capacity of 680cc, Leakey and his colleagues chose to lower this number to 600cc. While calling attention to anatomical differences between OH 7 and Australopithecus, they chose a behavior- the ability to make stone tools-to help place OH 7 in Homo. This point relied on stone tools found in the same geologic horizon as the fossils.

The OH 7 mandible is shown at the top right. In the 1960s, many researchers argued that Homo habilis was not a valid species, and that the fossils attributed to H. habilis were really members of other species. But with the discovery of KNM ER 1470, acceptance of Homo habilis became universal. In hindsight, this seems strange since ER 1470 is now considered to belong to a species distinct from H. habilis. There is much debate as to the number of species that existed in Homo 2 million years ago, and KNM ER 1470 is now assigned to the species Homo rudolfensis. The name Homo habilis is reserved primarily for the Olduvai material and several other specimens. The OH 62 partial skeleton of a female H. habilis provides another interesting twist in the debate about early members of the genus Homo.

Homo habilis was originally thought to be the ancestor to all later Homo. In a neat, linear progression, later species emerged resulting in what we call modern humans. This is now known not to be the case.