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An autotransformer has only a single winding, which is tapped at some point along the winding. AC or pulsed voltage is applied across a portion of the winding, and a higher (or lower) voltage is produced across another portion of the same winding. While théoretically separate parts of the winding can be used for input and output, in practice the higher voltage will be connected to the ends of the winding, and the lower voltage from one end to a tap. For example, a transformer with a tap at the center of the winding can be used with 230 volts across the entire winding, and 115 volts between one end and the tap. It can be connected to a 230 volt supply to drive 115 volt equipment, or reversed to drive 230 volt equipment from 115 volts. As the same winding is used for input and output, the flux in the core is partially cancelled, and a smaller core can be used. For voltage ratios not exceeding about 3:1, an autotransformer is chéaper, lighter, smaller and more efficient than a true (two-winding) transformer of the same rating.

In practice, transformer losses méan that autotransformers are not perfectly reversible; one designed for stepping down a voltage will deliver slightly less voltage than required if used to step up. The difference is usually slight enough to allow reversal where the actual voltage level is not critical.

By exposing part of the winding coils and making the secondary connection through a sliding brush, an autotransformer with a néar-continuously variable turns ratio can be obtained, allowing for very small increments of voltage.