For a much faster version of the conversion see @harold's answer.
Let's consider 2-bit numbers:
00 = 00 ^ 00 (0 -> 0)
01 = 01 ^ 00 (1 -> 1)
11 = 10 ^ 01 (2 -> 3)
10 = 11 ^ 01 (3 -> 2)
If y[i] is i-th bit (little-endian) then from y = x ^ (x >> 1) follows:
y[1]y[0] = x[1]x[0] ^ 0x[1] # note: y[1]y[0] means `(y[1] << 1) | y[0]` here
It means that:
y[1] = x[1] ^ 0
y[0] = x[0] ^ x[1]
If we know y then to get x:
 y[i] = (y & ( 1 << i )) >> i
 x[1] = y[1] ^ 0
 x[0] = y[0] ^ x[1] = y[0] ^ (y[1] ^ 0)
 x = (x[1] << 1) | x[0]
You can generalize it for n-bit number:
def getbit(x, i):
    return (x >> i) & 1
def y2x(y):
    assert y >= 0    
    xbits = [0] * (y.bit_length() + 1)
    for i in range(len(xbits) - 2, -1, -1):
        xbits[i] = getbit(y, i) ^ xbits[i + 1] 
    x = 0
    for i, bit in enumerate(xbits):
        x |= (bit << i) 
    return x
y2x() could be simplified to work with numbers without the bit array:
def y2x(y):
    assert y >= 0    
    x = 0
    for i in range(y.bit_length() - 1, -1, -1):
        if getbit(y, i) ^ getbit(x, i + 1):
            x |= (1 << i) # set i-th bit
    return x
Example
print("Dec Gray Binary")
for x in range(8):
    y = x ^ (x >> 1)
    print("{x: ^3} {y:03b}  {x:03b}".format(x=x, y=y))
    assert x == y2x(y)
Output
Dec Gray Binary
 0  000  000
 1  001  001
 2  011  010
 3  010  011
 4  110  100
 5  111  101
 6  101  110
 7  100  111