In this chapter the essential topics of microphones and loudspeakers are considered. The polar or directional characteristics of transducers are their most important attribute and are treated here before consideration of the operating principle. It will be seen that polar characteristics assume even greater importance if the illusion of stereophony is to be made realistic. The microphone is a measuring device and its output consists of intelligence rather than power. Consequently it is possible to conceive of an ideal microphone and the best practice approaches this quite closely. The same is not true in loudspeakers because of the requirement to transfer power.