The aim of this paper is twofold. First we discuss the origin of tree methods. Essentially we survey earlier methods that led to CHAID (Kass, 1980; Biggs et al., 1991). The second goal is then to explain in details the functioning of CHAID, especially the differences between the original method as described in Kass (1980) and the nowadays currently implemented extension that was proposed by Biggs et al. (1991).