diff --git a/DIRECTORY.md b/DIRECTORY.md
index 1ecacc3c395e..ebbb8ddc3110 100644
--- a/DIRECTORY.md
+++ b/DIRECTORY.md
@@ -27,6 +27,7 @@
             * [ClearLeftmostSetBit](https://github.com/TheAlgorithms/Java/blob/master/src/main/java/com/thealgorithms/bitmanipulation/ClearLeftmostSetBit.java)
             * [CountLeadingZeros](https://github.com/TheAlgorithms/Java/blob/master/src/main/java/com/thealgorithms/bitmanipulation/CountLeadingZeros.java)
             * [CountSetBits](https://github.com/TheAlgorithms/Java/blob/master/src/main/java/com/thealgorithms/bitmanipulation/CountSetBits.java)
+            * [GrayCodeConversion](https://github.com/TheAlgorithms/Java/blob/master/src/main/java/com/thealgorithms/bitmanipulation/GrayCodeConversion.java)
             * [HighestSetBit](https://github.com/TheAlgorithms/Java/blob/master/src/main/java/com/thealgorithms/bitmanipulation/HighestSetBit.java)
             * [IndexOfRightMostSetBit](https://github.com/TheAlgorithms/Java/blob/master/src/main/java/com/thealgorithms/bitmanipulation/IndexOfRightMostSetBit.java)
             * [IsEven](https://github.com/TheAlgorithms/Java/blob/master/src/main/java/com/thealgorithms/bitmanipulation/IsEven.java)
@@ -652,6 +653,7 @@
             * [ClearLeftmostSetBitTest](https://github.com/TheAlgorithms/Java/blob/master/src/test/java/com/thealgorithms/bitmanipulation/ClearLeftmostSetBitTest.java)
             * [CountLeadingZerosTest](https://github.com/TheAlgorithms/Java/blob/master/src/test/java/com/thealgorithms/bitmanipulation/CountLeadingZerosTest.java)
             * [CountSetBitsTest](https://github.com/TheAlgorithms/Java/blob/master/src/test/java/com/thealgorithms/bitmanipulation/CountSetBitsTest.java)
+            * [GrayCodeConversionTest](https://github.com/TheAlgorithms/Java/blob/master/src/test/java/com/thealgorithms/bitmanipulation/GrayCodeConversionTest.java)
             * [HighestSetBitTest](https://github.com/TheAlgorithms/Java/blob/master/src/test/java/com/thealgorithms/bitmanipulation/HighestSetBitTest.java)
             * [IndexOfRightMostSetBitTest](https://github.com/TheAlgorithms/Java/blob/master/src/test/java/com/thealgorithms/bitmanipulation/IndexOfRightMostSetBitTest.java)
             * [IsEvenTest](https://github.com/TheAlgorithms/Java/blob/master/src/test/java/com/thealgorithms/bitmanipulation/IsEvenTest.java)
diff --git a/src/main/java/com/thealgorithms/bitmanipulation/GrayCodeConversion.java b/src/main/java/com/thealgorithms/bitmanipulation/GrayCodeConversion.java
new file mode 100644
index 000000000000..83cd30c7d50a
--- /dev/null
+++ b/src/main/java/com/thealgorithms/bitmanipulation/GrayCodeConversion.java
@@ -0,0 +1,44 @@
+package com.thealgorithms.bitmanipulation;
+
+/**
+ * Gray code is a binary numeral system where two successive values differ in only one bit.
+ * This is a simple conversion between binary and Gray code.
+ * Example:
+ * 7 -> 0111 -> 0100 -> 4
+ * 4 -> 0100 -> 0111 -> 7
+ * 0 -> 0000 -> 0000 -> 0
+ * 1 -> 0001 -> 0000 -> 0
+ * 2 -> 0010 -> 0011 -> 3
+ * 3 -> 0011 -> 0010 -> 2
+ *
+ * @author Hardvan
+ */
+public final class GrayCodeConversion {
+    private GrayCodeConversion() {
+    }
+
+    /**
+     * Converts a binary number to Gray code.
+     *
+     * @param num The binary number.
+     * @return The corresponding Gray code.
+     */
+    public static int binaryToGray(int num) {
+        return num ^ (num >> 1);
+    }
+
+    /**
+     * Converts a Gray code number back to binary.
+     *
+     * @param gray The Gray code number.
+     * @return The corresponding binary number.
+     */
+    public static int grayToBinary(int gray) {
+        int binary = gray;
+        while (gray > 0) {
+            gray >>= 1;
+            binary ^= gray;
+        }
+        return binary;
+    }
+}
diff --git a/src/test/java/com/thealgorithms/bitmanipulation/GrayCodeConversionTest.java b/src/test/java/com/thealgorithms/bitmanipulation/GrayCodeConversionTest.java
new file mode 100644
index 000000000000..1fe792028dca
--- /dev/null
+++ b/src/test/java/com/thealgorithms/bitmanipulation/GrayCodeConversionTest.java
@@ -0,0 +1,29 @@
+package com.thealgorithms.bitmanipulation;
+
+import static org.junit.jupiter.api.Assertions.assertEquals;
+
+import org.junit.jupiter.api.Test;
+
+public class GrayCodeConversionTest {
+
+    @Test
+    public void testBinaryToGray() {
+        assertEquals(7, GrayCodeConversion.binaryToGray(5)); // 101 -> 111
+        assertEquals(4, GrayCodeConversion.binaryToGray(7)); // 111 -> 100
+        assertEquals(1, GrayCodeConversion.binaryToGray(1)); // 001 -> 001
+    }
+
+    @Test
+    public void testGrayToBinary() {
+        assertEquals(5, GrayCodeConversion.grayToBinary(7)); // 111 -> 101
+        assertEquals(4, GrayCodeConversion.grayToBinary(6)); // 110 -> 100
+        assertEquals(1, GrayCodeConversion.grayToBinary(1)); // 001 -> 001
+    }
+
+    @Test
+    public void testBinaryGrayCycle() {
+        int binary = 9; // 1001 in binary
+        int gray = GrayCodeConversion.binaryToGray(binary);
+        assertEquals(binary, GrayCodeConversion.grayToBinary(gray)); // Should return to original binary
+    }
+}