By the mid-20th century, "gay" was well-established as an antonym for "straight" (which had connotations of respectability), and to refer to the lifestyles of unmarried and/or unattached people. Other connotations of frivolousness and showiness in dress ("gay apparel") led to association with camp and effeminacy. This association no doubt helped the gradual narrowing in scope of the term towards its current dominant meaning, which was at first confined to subcultures. "Gay" was the preferred term since other terms, such as "queer", were felt to be derogatory. "Homosexual" is perceived as excessively clinical, since the sexual orientation now commonly referred to as "homosexuality" was at that time a mental illness diagnosis in the Diagnostic and Statistical Manual of Mental Disorders (DSM).

In mid-20th century Britain, where male homosexuality was illegal until the Sexual Offences Act 1967, to openly identify someone as homosexual was considered very offensive and an accusation of serious criminal activity. Additionally, none of the words describing any aspect of homosexuality were considered suitable for polite society. Consequently, a number of euphemisms were used to hint at suspected homosexuality. Examples include "sporty" girls and "artistic" boys, all with the stress deliberately on the otherwise completely innocent adjective.

By 1963, a new sense of the word "gay" was known well enough to be used by Albert Ellis in his book "The Intelligent Woman's Guide to Man-Hunting". However, later examples of the original meaning of the word being used in popular culture include the theme song to the 1960–1966 animated TV series "The Flintstones", whereby viewers are assured that they will "have a gay old time." Similarly, the 1966 Herman's Hermits song "No Milk Today", which became a Top 10 hit in the UK and a Top 40 hit in the U.S. and included the lyric "No milk today, it was not always so / "The company was gay", we had turn night into day." In June 1967, the headline of the review of the Beatles' "Sgt. Pepper's Lonely Hearts Club Band" album in the British daily newspaper "The Times" stated, "The Beatles revive hopes of progress in pop music with their gay new LP". As late as 1970, the first episode of "The Mary Tyler Moore Show" has the demonstrably straight Mary Richards' downstairs neighbor, Phyllis, breezily declaiming that Mary is, at age 30, still "young and gay."

There is little doubt that the homosexual sense is a development of the word's traditional meaning, as described above. It has nevertheless been claimed that "gay" stands for "Good As You", but there is no evidence for this: it is a folk etymology backronym.

Homosexuality
Shift to "homosexual"
Gay community vs LGBT community
Descriptor