The original potentiometer is a type of bridge circuit for measuring voltages. The word itself derives from the phrase "voltage potential," and "potential" was used to refer to "strength." The original potentiometers are divided into four main classes: the constant resistance potentiometer, the constant current potentiometer, the microvolt potentiometer and the thermocouple potentiometer.

In modern usage, a potentiometer is a potential divider, a three terminal resistor where the position of the sliding connection is user adjustable via a knob or slider. Potentiometers are sometimes provided with one or more switches mounted on the same shaft. For instance, when attached to a volume control, the knob can also function as an on/off switch at the lowest volume.

Ordinary potentiometers are rarely used to control anything of significant power (even lighting) directly due to resistive losses, but they are frequently used to adjust the level of analog signals (e.g. volume controls on audio equipment) and as control inputs for electronic circuits (e.g. a typical domestic light dimmer uses a potentiometer to set the point in the cycle at which the triac turns on).
Potentiometers used to control high power are normally called rheostats.

A potentiometer is constructed using a flat graphite annulus as the resistive element, with a sliding contact (wiper) sliding around this annulus. The wiper is connected to an axle and, via another rotating contact, is brought out as the third terminal. On panel pots, the wiper is usually the centre terminal. For single turn pots, this wiper typically travels just under one revolution around the contact. 'Multiturn' potentiometers also exist, where the resistor element may be helical and the wiper may move 10, 20, or more complete revolutions.
In addition to graphite, other materials may be used for the resistive element. These may be resistance wire or carbon particles in plastic or a ceramic/metal mixture. One popular form of rotary potentiometer is called a string pot. It is a multi-turn potentiometer with an attached reel of resistance wire turning against a spring. It's very convenient for measuring movement and therefore acts as a position transducer.
In a linear slider pot, a sliding control is provided instead of a dial control. The word linear also describes the geometry of the resistive element which is a rectangular strip, (not an annulus as in a rotary potentiometer). Because of their construction, this type of pot has a greater potential for getting contaminated.
Potentiometers can be obtained with either linear or logarithmic laws (or "tapers").

A rheostat is essentially a potentiometer, but is usually much larger, designed to handle much higher voltage and current. Typically these are constructed as a resistive wire wrapped around a toroid with the wiper moving over the upper surface of the toroid, sliding from one turn of the wire to the next. Sometimes a rheostat is made from resistance wire wound on a heat resisting cylinder with the slider made from a number of metal fingers that grip lightly onto a small portion of the turns of resistance wire. The 'fingers' can be moved along the coil of resistance wire by a sliding knob thus changing the 'tapping' point. They are usually used as variable resistors rather than variable potential dividers.

One of the most common uses for modern low-power potentiometers is as audio control devices. Both sliding pots (also known as faders) and rotary potentiometers (commonly called knobs) are regularly used to adjust loudness, frequency attenuation and other characteristics of audio signals.

The 'log pot' is used as the volume control in audio amplifiers, where it is also called an "audio taper pot", because the amplitude response of the human ear is also logarithmic. It ensures that, on a volume control marked 0 to 10, for example, a setting of 5 sounds half as loud as a setting of 10. There is also an anti-log pot or reverse audio taper which is simply the reverse of a log pot. It is almost always used in a ganged configuration with a log pot, for instance, in an audio balance control.

A potentiometer used in combination with an inductor or capacitor acts as a "tone" control.