A large stack of lead-emulsion sandwich detector assembly was flown over Hyderabad, India. High energy gamma rays at the float altitude were unambiguously identified from the cascades they induced, and their energies reliably determined by improved methods. From an analysis of 163 gamma rays of energy ≳ 30 GeV, it is found that the differential energy spectrum is represented by the power lawJ_r(E)= 129·4E^{−2·62±0·12} photons m⁻² sr⁻¹sec⁻¹ GeV⁻¹ at an effective atmospheric depth of 14·3 g cm⁻²; this is the first reliable balloon measurement of atmospheric gamma rays in the energy range 40–1000 GeV. After correcting for the gamma rays radiated by the primary cosmic ray electrons, the production spectrum of gamma rays, resulting from the collisions of cosmic ray nuclei with air nuclei, at the top of the atmosphere isP_r(E, 0)=8·2 × 10⁻⁴ E^2.60±0.09 photons g⁻¹sr⁻¹sec⁻¹ GeV⁻¹. The atmospheric propagation of the electromagnetic component due to the cascade process is also derived from the gamma ray production spectrum.