In 1946, at the conclusion of World War II, Congress passed the Atomic Energy Act, which established the Atomic Energy Commission (AEC) to succeed the wartime Manhattan Project, and gave it sole responsibility for developing atomic energy.  At this time , Captain Hyman G. Rickover was assigned to the Navy Bureau of Ships, the organization responsible for ship design.  Captain Rickover recognized the military implications of successfully harnessing atomic power for submarine propulsion and that it would be necessary for the Navy to work with the AEC to develop such a program.  He arranged for himself and several officers and civilians to be sent to the AEC laboratory at Oak Ridge, TN for one year to learn the fundamentals of nuclear reactor technology.

Although the concept of using a reactor to produce heat was understood, the technology to build and operate a shipboard nuclear propulsion plant did not exist.  Though there were several reactor concepts, the real challenge was to develop the technology and transform theory into practical engineering.  New materials had to be developed, components designed, and fabrication techniques worked out.  Further, installing and operating a steam propulsion plant inside the confines of a submarine and under the unique sub-sea pressure conditions, raised a number of technical challenges.  With these obstacles, the team at Oak Ridge knew that to build a Naval nuclear propulsion plant would require substantial commitment of resources and a new level of government and industry commitment.

Captain Rickover returned to Washington and used every opportunity from his post at the Bureau of Ships to argue the need to establish a Naval Nuclear Propulsion Program.   Since there were many unknowns, he recommended undertaking two parallel reactor development projects:  a pressurized water cooled reactor and a liquid metal cooled reactor.  On August 4, 1948, the Navy created the new Nuclear Power Branch with Rickover as its head within the Bureau's Research Division.

By 1949, Captain Rickover had forged an arrangement between the AEC and the Navy under which he would proceed with both projects.  In 1949, Rickover's new organization contracted with Westinghouse to develop a facility (the Bettis Atomic Power Laboratory) to work on the pressurized water design.  In 1950, he contracted with General Electric to determine whether a liquid metal reactor design, that it was developing at the AEC's Knolls Atomic Power Laboratory, could be applied to Naval propulsion.

Captain Rickover recruited a strong technical staff from those who studied at Oak Ridge, others from past service in the Navy, and top young nuclear engineers right out of college.  This core of engineers and Naval officers oversaw every aspect of the development of nuclear propulsion.  USS Nautilus, using the pressurized water design, and USS Seawolf, using the liquid metal design, were built, tested, commissioned, and put to sea in 1954 and 1957 respectively.  While Seawolf operated at sea for about two years, experience demonstrated that pressurized water technology was preferable for Naval applications.  It thus became the basis for all subsequent U.S. nuclear-powered warship designs.  Within a few short years, a revolution in naval warfare had been born.

In the 1970's, Government restructuring moved the Naval Nuclear Propulsion Program from the AEC (which was disestablished) to what became the Department of Energy.  During this transition, the Program retained its dual agency responsibility.  Although the Naval Nuclear Propulsion Program has grown in size and scope over the years its basic organization, responsibilities, and technical discipline have remained much as when it was first established.