Congress authorized the establishment of the Coast Guard Medal (Public Law 207 of the 81st Congress) on 4 August 1949. The actual medal was designed by Thomas Hudson Jones of the United States Army's Institute of Heraldry. As designed, the seal of the Coast Guard appears in the center of a bronze octagon. The seal is contained within a border of continuous cable. The octagon shape is copied from the Soldier's Medal and the Navy and Marine Corps Medal, and the seal in the center refers to Coast Guard service. The border of continuous cable refers to both naval service and perfection of ideals in the service of man. The medal's ribbon is decorated with central and edge stripes of light blue and centered on either half of the ribbon is a field of white containing three red stripes. The colors were adapted from those of the Coast Guard seal.

The Coast Guard Medal is awarded to any member of the Armed Forces who, while serving in any capacity with the Coast Guard, distinguishes himself or herself by heroism not involving actual conflict with an enemy. To justify this decoration, the individual must have performed a voluntary act of heroism in the face of great personal danger of such a magnitude that it stands out distinctly above normal expectations.