A direct current (DC) always flows through a conductor in one direction, but an alternating current (AC) constantly reverses itself as a result of reversing electromotive force. One complete reversal is a cycle, and the number of cycles per second is the frequency of the alternating current. The standard frequency of alternating current in the United States and the rest of North America is 60 Hz (1 Hz, or hertz, equals 1 cycle per second); in Europe it is 50 Hz. Originally, only direct current was generated for public use. The enormous advantages of alternating current were not realized until George Westinghouse developed the transformer in the late 19th century. Buffalo, N.Y., was the first U.S. city to be lit using alternating current.

The transformer made it possible to change the voltage (and therefore the current) of AC by a simple, static device. This could not be done with DC. When electricity is transmitted, power loss is minimized by stepping up the voltage from the generator, thus transmitting a high voltage, and stepping down the voltage at the user's end. When required, DC is easily obtained from an AC current with a rectifier. Converting DC to AC requires an inverter, which is a more complex device. AC motors and alternators (AC generators) have greater reliability than their DC counterparts, because AC generators do not require commutators (metal slip-rings for picking up current).

If AC voltage is plotted against time, the resulting curve is a sine wave. This characteristic is of interest to physicists and engineers; the physical characteristics of AC can then be deduced from the mathematical properties of a sine wave. The maximum value that the voltage reaches is its peak value, but effective, or root-mean-square (rms), values are nearly always used in practice. The rms value of current or voltage has the same heating effect as an equal, steady-state DC current or voltage. By calculation, it is 0.707 times the peak value. In most countries power is supplied at 240 volts (rms), which means that the voltage rises to a peak of 339 volts. Exceptions are the United States and Canada, which supply 110 volts (a peak of 156 volts) of electricity.

AC circuits obey Ohm's law, E = IR, where E is voltage, I is current, and R is resistance. When reactive elements (see reactance) are present in the circuit, Ohm's law becomes E = IZ, where Z is the impedance. The waveforms of current and voltage are usually displaced, reaching their peaks at different times. This difference is denoted by the phase angle ñ (a complete cycle is 360¡). Thus the formula for powerÑwhich, in DC circuits, is P = EIÑbecomes P = EI cos ñ, and the term cosñ is known as the power factor. The value of ñ depends upon the combination of capacitors, inductors, and resistors in the circuit. Many simple electrical devices, such as the lightbulb, work equally well on AC or DC, although their rates of power consumption may differ slightly.