A moving electric current produces a magnetic field proportional to the amount of current flow. This magnetic field can be made stronger by winding the wire into a coil and further enhanced if done around an iron containing (ferrous) core.

A transformer utilizes an inductor to increase or decrease the voltage in a circuit. AC flowing in a coil wrapped around an iron core magnetizes the core causing it to produce a magnetic field. This magnetic field generates a voltage in a nearby coil of wire and, depending on the number of turns in the wire of the primary (source) and secondary coils and their proximity, voltage is induced in the secondary coil.