Modulation uses baseband signal to control the change of one or several parameters of carrier signal, and loads information on it to form modulation signal transmission, while demodulation is the reverse process of modulation, and the parameter change of modulation signal is restored to the original baseband signal by a specific method.

The information in the computer is a digital signal composed of "0" and "1", but only analog electrical signals are transmitted on the telephone line (analog signals are continuous and digital signals are discontinuous). Therefore, when two computers want to transmit data through telephone lines, a device is needed to convert the numbers into analog.

This digital-to-analog converter is the modem we are going to discuss here. When the computer sends data, the digital signal is first converted into the corresponding analog signal by the modem. This process is called "modulation" and also called D/A conversion.

Before the modulation signal is transmitted to another computer by telephone carrier, the modem of the receiver is also responsible for restoring the analog signal to a digital signal that can be recognized by the computer. This process is called "demodulation" and also called A/D conversion. It is through such a digital-to-analog conversion process of "modulation" and "demodulation" that the remote communication between two computers is realized.

There are many kinds of modulation and different classification methods. According to the form of modulation signal, it can be divided into analog modulation and digital modulation. Modulation with analog signals is called analog modulation; Modulation with data or digital signals is called digital modulation. According to the type of modulation signal, it can be divided into pulse modulation, sine wave modulation and intensity modulation (such as the modulation of incoherent light).