Abstract
In this paper we investigate how Newton discovered the generalized binomial theorem. Newton's binomial theorem, or binomial series can be found in Calculus text books as a special case of Taylor series. It can also be understood as a formal power series which was first conceived by Euler if convergence does not matter much. Discovered before Taylor or Euler, Newton's binomial theorem must have a good explanation of its birth and validity. Newton learned the interpolation method from Wallis' famous book ${\ll}$Arithmetica Infinitorum${\gg}$ and employed it to get the theorem. The interpolation method, which Wallis devised to find the areas under a family of curves, was by nature arithmetrical but not geometrical. Newton himself used the method as a way of finding areas under curves. He noticed certain patterns hidden in the integer binomial sequence appeared in relation with curves and then applied them to rationals, finally obtained the generalized binomial sequence and the generalized binomial theorem.