Clauser, along with Alain Aspect and Anton Zeilinger, are being honored for their landmark achievements in quantum mechanics.
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In a press release, the Nobel Committee for Physics said the three men "conducted groundbreaking experiments using entangled quantum states, where two particles behave like a single unit even when they are separated."
The committee says their results have "cleared the way for new technology based upon quantum information."
Clauser says he found out he won the Nobel Prize from a phone call at 2:50 a.m. on Tuesday.
"A friend from San Diego called and was the first to wake me up," he said.
And he says that the phone hasn't stopped ringing yet.
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79-year-old Clauser went to bed a retiree and woke up a Nobel Prize winner.
"I'm happy, it's been a long time waiting," he said.
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The walls of his home, are plastered with trophies, not from his research or work in physics but rather, from his first passion.
"I'm into sailboat racing," he said.
Honored alongside two other scientists out of France and Austria, the Nobel Committee for Physics says their discovery laid the foundation for a new era of quantum technology.
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"It turns out that Einstein was wrong," he said. "Everybody at the time was telling me 'oh, this is silly, everybody knows quantum mechanics was right, you don't even need to do an experiment.'"
Clauser conducted his first experiment, where he made this discovery, at UC Berkeley a half-century ago in 1972.
"Very few people who thought I was doing anything important, everyone kept telling me, 'no, no you're wasting time and money, go back and finally start doing some real physics for a change,'" he said. "His definitions of reality really didn't quite work."
Nevertheless, he stuck to his research and was later awarded the 'Wolf Prize' by the Wolf Foundation in Israel back in 2010, which by some, can be considered a stepping stone to getting a Nobel Prize.
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"Things move slowly," he said.
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And 12 years later, finally, with a Nobel Prize under his belt, he's got some advice for up-and-coming scientists that will follow in his footsteps.
"Do what you enjoy doing, but try to do it carefully and try to do good science," he said.
Clauser will travel to Stockholm for a week in December to accept the Nobel Prize.
The three recipients will be awarded 10 million Swedish kronor, which is a little more than $900,000 in U.S. dollars.
The award money will be shared equally among the three winners.