Just as many conventional thermal power stations generate electricity by harnessing the thermal energy released from burning fossil fuels, nuclear power plants convert the energy released from the nucleus of an atom, typically via nuclear fission.

When a relatively large fissile atomic nucleus absorbs a neutron, a fission of the atom results. Fission splits the atom into two or more smaller nuclei with kinetic energy (known as fission products) and also releases gamma radiation and free neutrons. A portion of these neutrons may later be absorbed by other fissile atoms and create more fissions, which release more neutrons, and so on creating a chain reaction.

This nuclear chain reaction can be controlled by using neutron poisons and neutron moderators to change the portion of neutrons that will go on to cause more fissions. Nuclear reactors generally have automatic and manual systems to to shut the fission reaction down if unsafe conditions are detected.

A cooling system removes heat from the reactor core and transports it to another area of the plant, where the thermal energy can be harnessed to produce electricity or to do other useful work. Typically the hot coolant will be used as a heat source for a boiler, and the pressurized steam from that boiler will power one or more steam turbine driven electrical generators.

Uranium is a fairly common element in the Earth's crust. The world's present measured resources of uranium, economically are enough to last for "at least a century" at current consumption rates.

Uranium’s contribution to the overall cost of the electricity produced is relatively small, so even a large price escalation will have relatively little effect on final price. For instance, typically a doubling of the uranium market price would increase the fuel cost for a light water reactor by 26% and the electricity cost about 7%, whereas doubling the price of natural gas would typically add 70% to the price of electricity from that source.

The safe storage and disposal of nuclear waste is a significant challenge. The most important waste stream from nuclear power plants is spent fuel. A large nuclear reactor produces 3 cubic metres (25–30 tonnes) of spent fuel each year. Nuclear waste can be generally classified as either "low level" radioactive waste or "high level" radioactive waste. Low level nuclear waste usually includes material used to handle the highly radioactive parts of nuclear reactors. The level of radioactivity and the half life of the radioactive isotopes in low level waste is relatively small. Storing the waste for a period of 10 to 50 years will allow most of the radioactive isotopes in low level waste to decay, at which point the waste can be disposed of as normal refuse.

High level radioactive waste is generally material from the core of the nuclear reactor or nuclear weapon. Most of the radioactive isotopes in high level waste emit large amounts of radiation and have extremely long half-lives (some longer than 100,000 years) creating long time periods before the waste will settle to safe levels of radioactivity. There are a few ways to deal with this waste, but all of them have significant costs or other limitations.