Whether natural gas, liquid propane or oil a furnace uses one of these fossil fuels to generate heat. The fuel is burned in a combustion chamber also known as a heat exchanger inside the furnace. Cool return air is drawn into the furnace by a fan and passes around or through the heat exchanger where heat energy is transferred to the air. The air leaves the furnace through a duct system and is delivered to the structure as warm or hot air.

Condensing furnaces further extract heat energy from the byproducts of the combustion process by passing them through a coil, or secondary heat exchanger, in the air stream before sending them to the exterior of the structure. So much heat is exchanged in this secondary process that condensation forms and then is drained from the furnace. Condensing furnaces are also known as High Efficiency furnaces because of their ability to remove additional heat energy.

An evaporator coil can be attached to a furnace which uses the furnace blower to move air across the evaporator coil to provide air conditioning in the summer.