In Colorado, Tesla carried out various long distance power transmission experiments. Tesla effect is the application of a type of electrical conduction (that is, the movement of energy through space and matter; not just the production of voltage across a conductor). Through longitudinal waves, Tesla transferred energy to receiving devices. He sent electrostatic forces through natural media across a conductor situated in the changing magnetic flux and transferred power to a conducting receiving device (such as Tesla's wireless bulbs).

In the Colorado Springs lab, Tesla observed unusual signals that he later thought may have been evidence of extraterrestrial radio communications coming from Venus or Mars. He noticed repetitive signals from his receiver which were substantially different from the signals he had noted from storms and earth noise. Specifically, he later recalled that the signals appeared in groups of one, two, three, and four clicks together. Tesla had mentioned before this event and many times after that he thought his inventions could be used to talk with other planets. There have even been claims that he invented a "Teslascope" for just such a purpose. It is debatable what type of signals Tesla received or whether he picked up anything at all. Research has suggested that Tesla may have had a misunderstanding of the new technology he was working with, or that the signals Tesla observed may have simply been an observation of a non-terrestrial natural radio source such as the Jovian plasma torus signals.

Tesla left Colorado Springs on 7 January 1900. The lab was torn down and its contents sold to pay debts. The Colorado experiments prepared Tesla for his next project, the establishment of a wireless power transmission facility that would be known as Wardenclyffe. Tesla was granted U.S. Patent 685,012 for the means of increasing the intensity of electrical oscillations. The United States Patent Office classification system currently assigns this patent to the primary Class 178/43 ("telegraphy/space induction"), although the other applicable classes include 505/825 ("low temperature superconductivity-related apparatus").

Later years

In 1900, with US$150,000 (51 % from J. Pierpont Morgan), Tesla began planning the Wardenclyffe Tower facility. In June 1902, Tesla's lab operations were moved to Wardenclyffe from Houston Street. The tower was finally dismantled for scrap during World War I. Newspapers of the time labeled Wardenclyffe "Tesla's million-dollar folly". In 1904, the US Patent Office reversed its decision and awarded Guglielmo Marconi the patent for radio, and Tesla began his fight to re-acquire the radio patent. On his 50th birthday in 1906, Tesla demonstrated his 200 hp (150 kW) 16,000 rpm bladeless turbine. During 1910–1911 at the Waterside Power Station in New York, several of his bladeless turbine engines were tested at 100–5000 hp.

Since the Nobel Prize in Physics was awarded to Marconi for radio in 1909, Thomas Edison and Tesla were mentioned as potential laureates to share the Nobel Prize of 1915 in a press dispatch, leading to one of several Nobel Prize controversies. Some sources have claimed that due to their animosity toward each other neither was given the award, despite their enormous scientific contributions, and that each sought to minimize the other one's achievements and right to win the award, that both refused to ever accept the award if the other received it first, and that both rejected any possibility of sharing it.