(updated for 2013)
Early astronomers pointed to 3 lines of evidence for the ISM:
- Extinction. The ISM obscures the light from background stars. In 1919, Barnard (JC 2011, 2013) called attention to these “dark markings” on the sky, and put forward the (correct) hypothesis that these were the silhouettes of dark clouds. A good rule of thumb for the amount of extinction present is 1 magnitude of extinction per kpc (for typical, mostly unobscured lines-of-sight).
- Reddening. Even when the ISM doesn’t completely block background starlight, it scatters it. Shorter-wavelength light is preferentially scattered, so stars behind obscuring material appear redder than normal. If a star’s true color is known, its observed color can be used to infer the column density of the ISM between us and the star. Robert Trumpler first used measurements of the apparent “cuspiness” and the brighnesses of star clusters in 1930 to argue for the presence of this effect. Reddening of stars of “known” color is the basis of NICER and related techniques used to map extinction today.
- Stationary Lines. Spectral observations of binary stars show doppler-shifted lines corresponding to the radial velocity of each star. In addition, some of these spectra exhibit stationary (i.e. not doppler-shifted) absorption lines due to stationary material between us and the binary system. Johannes Hartmann first noticed this in 1904 when investigating the spectrum of Orionis: “The calcium line at [angstroms] exhibits a very peculiar behavior. It is distinguished from all the other lines in this spectrum, first by the fact that it always appears extraordinarily week, but almost perfictly sharp… Closer study on this point now led me to the quite surprising result that the calcium line… does not share in the periodic displacements of the lines caused by the orbital motion of the star”
Helpful References: Good discussion of the history of extinction and reddening, from Michael Richmond.