Varuna was discovered by American astronomer Robert McMillan using the Spacewatch 0.9-meter telescope during a routine survey on 28 November 2000. The Spacewatch survey was conducted by McMillan at the Kitt Peak National Observatory near Tucson, Arizona. At the time of discovery, Varuna was located at a moderately dense star field close to the northern galactic equator. Although Varuna was not detected by McMillan's real-time computer software, he was able to identify Varuna moving slowly among the background stars by manually comparing multiple scans of the same region using the blinking technique. After McMillan's observing shift, follow-up observations of Varuna were conducted by astronomer Jeffrey Larsen in order to confirm the object. By the end of Larsen's observing shift, both McMillan and Larsen had made a total of 12 observations that spanned three nights.