These are materials in which a very small concentration (at most a few percent) of a magnetic element, often iron or manganese, is substituted at random locations inside a nonmagnetic metallic host, such as one of the noble metals (copper, silver, or gold).

At low densities of the magnetic atoms, their resistance, which in normal metals decreases and eventually flattens as the temperature is lowered, starts to rise again at a few degrees above absolute zero. This came to be known as the Kondo effect.

At higher concentrations (already at about 1%), the impurities in dilute magnetic alloys begin interacting, and they were among the first examples of Spin glasses.