An automatic transmission shifter works by using planetary gear sets to provide different gear ratios. The transmission connects to the bell housing, which contains a torque converter instead of a clutch like in a manual transmission, and the bell housing connects to the engine.

The torque converter is made up of three parts: a stator, turbine and impeller, which is part of the torque converter's housing. The engine's flex plate connects directly to the torque converter, so if the crankshaft rotates, so does the torque converter's housing. When the engine rotates, it makes the impeller force fluid at the turbine, rotating it and sending torque to the transmission. The stator sits between the impeller and turbine, and its purpose is to reduce churning losses of the fluid, since the fluid flows in a loop between the impeller and the turbine.

The planetary gear sets are what provide the actual gear ratios. A band or clutch is used to lock part of the gear set while another part rotates, helping to transmit torque that in turn creates gear reduction or overdrive ratios or manual shift gears when needed. The band usually only comes into play when selecting gears such as reverse, neutral or park, but some automatic transmissions also allow the driver to manually select D1, D2 or D3. The clutch is controlled by the transmission's internal programming.