The basic mechanism of the converter is to provide a large surface area of catalyst, to maximize the rate of the chemical reactions. A catalyst is a substance that speeds up a reaction, but is not itself affected by the reaction. The catalyst usually consists of platinum, palladium, or rhodium coated beads that provide a good surface for the reaction to take place. A converter can usually provide a massive surface area equivalent to five football fields. This can be done using corrugated sheets of metal or ceramic structures.

Both a reduction and an oxidation are required to clean up the emission gas. These reactions are most efficient when different catalysts are used. Consequently, modern catalytic converts consist of three distinct parts, each with a different catalyst. Three reactions have been initially chosen as representative for the performance of the metallic phases in the three-way catalyst, namely:

In the reduction process, nitrogen dioxide (NO₂) reacts to form oxygen (O₂) and nitrogen gas (N₂). Reduction of nitrogen oxide (NOx) is brought about by the rhodium, which inhibits the cracking of the N₂ molecule (which when oxidized, would form NOx) while also promoting the cracking of any NOx molecules that may have formed.

2 NO₂ + 4 CO = N₂ + 4 CO₂

Carbon monoxide (CO) reacts with oxygen to form carbon dioxide (CO₂).

2 CO + O₂ = 2CO₂

Hydrocarbons (HC) react with oxygen to form carbon dioxide (CO₂). The oxidation of alkanes takes place on palladium, platinum, and nickel.

HC + 2O₂ = H₂O + 2CO₂

Catalytic converter basics.