A potentiometer is a manually adjustable resistor. The way this device works is relatively simple. One terminal of the potentiometer is connected to a power source. Another is hooked up to ground (a point with no voltage or resistance and which serves as a neutral reference point), while the third terminal runs across a strip of resistive material. This resistive strip generally has a low resistance at one end; its resistance gradually increases to a maximum resistance at the other end. The third terminal serves as the connection between the power source and ground, and is usually interfaced to the user by means of a knob or lever. The user can adjust the position of the third terminal along the resistive strip in order to manually increase or decrease resistance. By controlling resistance, a potentiometer can determine how much current flows through a circuit. When used to regulate current, the potentiometer is limited by the maximum resistivity of the strip.

The power of this simple device is not to be underestimated. In most analog devices, a potentiometer is what establishes the levels of output. In a loud speaker, for example, a potentiometer directly adjusts volume; in a television monitor, it controls brightness.

A potentiometer can also be used to control the potential difference, or voltage, across a circuit. The setup involved in utilizing a potentiometer for this purpose is a little bit more complicated. It involves two circuits: the first circuit consists of a cell and a resistor. At one end, the cell is connected in series to the second circuit, and at the other end it is connected to a potentiometer in parallel with the second circuit. The potentiometer in this arrangement drops the voltage by an amount equal to the ratio between the resistance allowed by the position of the third terminal and the highest possible resistivity of the strip. In other words, if the knob controlling the resistance is positioned at the exact halfway point on the resistive strip, then the output voltage will drop by exactly fifty percent, no matter how high the potentiometer's input voltage. Unlike with current regulation, voltage regulation is not limited by the maximum resistivity of the strip.