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Professor William Wallace Campbell of the Lick Observatory announced that Capella was binary in 1899, based on spectroscopic observations—he noted on photographic plates taken from August 1896 to February 1897 that a second spectrum appeared superimposed over the first, and that there was a doppler shift to violet in September and October and to red in November and February—showing that the components were moving toward and away from the Earth (and hence orbiting each other). Almost simultaneously, British astronomer Hugh Newall had observed its composite spectrum with a four prism spectroscope attached to a 25-inch (64 cm) telescope at Cambridge in July 1899, concluding that it was a binary star system.

Many observers tried to discern the component stars without success. Known as "The Interferometrist's Friend", it was first resolved interferometrically in 1919 by John Anderson and Francis Pease at Mount Wilson Observatory, who published an orbit in 1920 based on their observations. This was the first interferometric measurement of any object outside the Solar System. A high-precision orbit was published in 1994 based on observations by the Mark III Stellar Interferometer, again at Mount Wilson Observatory. Capella also became the first astronomical object to be imaged by a separate element optical interferometer when it was imaged by the Cambridge Optical Aperture Synthesis Telescope in September 1995.

In 1914, Finnish astronomer Ragnar Furuhjelm observed that the spectroscopic binary had a faint companion star, which, as its proper motion was similar to that of the spectroscopic binary, was probably physically bound to it. In February 1936, Carl L. Stearns observed that this companion appeared to be double itself; this was confirmed in September that year by Gerard Kuiper. This pair are designated Capella H and L.