A heat engine is a device used to extract heat from a source and then convert it into mechanical work used for various applications. For example, a steam engine on an old-style train can produce the work needed for driving the train.

Whenever we consider heat engines (and associated devices such as refrigerators and heat pumps), we do not use the standard sign convention for heat and work. For convenience, we assume that the symbols Q_h, Q_c, and W represent only the amounts of heat transferred and work delivered, regardless of what the givers or receivers are. Whether heat is entering or leaving a system, or work is done to or by a system, the symbols are indicated by the proper signs in front of them and additionally by the direction arrows.

We assume that a heat engine is constructed between a heat source (high-temperature or hot reservoir) and a heat sink (low temperature or cold reservoir). The engine absorbs heat Q_h from a heat source (hot reservoir) of Kelvin temperature T_h, uses part of this energy to produce useful work W, and then discards the remaining energy as heat Q_c into a heat sink (cold reservoir) of Kelvin temperature T_c.

Power plants and internal combustion engines are examples of heat engines. Power plants use steam produced at high temperatures to drive electric generators, while releasing heat to the atmosphere or a nearby body of water (in the role of the heat sink). In an internal combustion engine, a hot gas-air mixture is used to push a piston, and heat is released to the nearby atmosphere in a similar manner.

The most crucial measure of a heat engine is its efficiency (e), which is “what we get out” divided by "what we put in"during each cycle. The efficiency is always less than unity. Ideally, we wish to convert all the heat into work, but there is always some heat lost; hence Q_c can never be zero.