Alvarez and his father Luis W. Alvarez are most widely known for their discovery that a clay layer occurring right at the Cretaceous–Paleogene boundary was highly enriched in the element iridium. Since iridium enrichment is common in asteroids, but very uncommon on the Earth, they further postulated that the layer had been created by the impact of a large asteroid with the Earth and that this impact event was the likely cause of the Cretaceous–Paleogene extinction event. This iridium enrichment has now been observed in many other sites around the world. And further, the very large Chicxulub crater was identified and is now regarded as the definitive evidence of a large impact. Consequently, a majority of scientists now accept the impact scenario as the most likely cause for the Cretaceous–Paleogene extinction event which occurred 66 million years ago and eliminated 75% of all species, including all non-avian dinosaurs. His book, T. Rex and the Crater of Doom, details the discovery of the Cretaceous–Paleogene extinction event. In addition to his interest in extinction events and impacts, Alvarez has contributed to the understanding of Mediterranean tectonics, Roman geology and archeology, and the establishment of magnetostratigraphic correlations.
Alvarez began teaching a course in Big History at UC Berkeley in 2006 under the title "Big History: Cosmos, Earth, Life, Humanity." He last taught the course in 2011 where it was videotaped and made freely available online. According to Alvarez, Big History is the "attempt to understand, in a unified and interdisciplinary way, the history of the Cosmos, Earth, Life and Humanity." This definition was later adopted by the International Big History Association. Alvarez's course is open to all majors and grade levels and seeks to provide a broad understanding of the past, present and future. Alvarez helped organize a meeting of Big Historians at the Geological Observatory at Coldigioco in Italy in 2010 which resulted in the establishment of the International Big History Association. In 2011, the IBHA is a 5013 non-profit organization. Alvarez was one of the founding members of the IBHA, and served on the advisory board until August 7, 2014 when he stepped down at the 2014 IBHA conference held at Dominican University of California.
Alvarez's most recent contribution to the field of Big History has been the creation of a free, open source, zoomable timeline in partnership with Microsoft Research called ChronoZoom. ChronoZoom is a computer-graphical approach to dealing with this problem of visualizing and understanding time scales, and presenting vast quantities of historical information in a useful way. ChronoZoom was introduced at the 97th Annual Faculty Research Lecture at UC Berkeley.