How does a heat pump / air conditioner work?

Heat pumps / air conditioners work by extracting heat from one area and releasing that heat into another area. This is done using refrigerant which is controlled by varying the pressure and flow of the refrigerant. When an air conditioner is cooling a room, heat is extracted using the indoor unit and transferred to the outdoor unit to be released to the atmosphere. When the unit is heating a room, heat is extracted by the outdoor unit and transferred to the indoor unit to warm the space.