An n-type semiconductor is formed by doping a pure semiconductor (silicon) with a pentavalent impurity (such as phosphorus or arsenic), which donates free electrons; the majority carriers are electrons and the minority carriers are holes. A p-type semiconductor is formed by doping with a trivalent impurity (such as boron or aluminium), which creates holes; the majority carriers are holes and the minority carriers are electrons. Both types are electrically neutral overall.

When a p-n junction is formed, electrons from the n-side diffuse into the p-side and holes from the p-side diffuse into the n-side, and they recombine near the junction. This leaves a region near the junction that has no free charge carriers but has immobile charged ions; this region is called the depletion region (or depletion layer). The immobile ions set up an internal electric field that opposes further diffusion; the potential difference developed across the depletion region is called the potential barrier.

In forward biasing, the p-side is connected to the positive terminal and the n-side to the negative terminal of the battery; this reduces the width of the depletion region and the potential barrier, so a large current flows and the diode conducts. In reverse biasing, the p-side is connected to the negative terminal and the n-side to the positive terminal; this increases the width of the depletion region and the potential barrier, so only a very small (negligible) current flows and the diode does not conduct.