Mechanical refrigeration, whether for refrigeration itself or for air conditioning, relies on a closed system in which a refrigerant—basically a compound of elements with a low boiling point—circulates through sets of coils that absorb and dissipate heat as the refrigerant is alternately compressed and allowed to expand. In a refrigerator the circulating refrigerant draws heat from the interior of the refrigerator, leaving it cool; in an air conditioner, coils containing refrigerant perform a similar function by drawing heat and moisture from room air.

This may sound simple, but it took the pioneering genius of a number of engineers and inventors to work out the basic principles of cooling and humidity control. Their efforts resulted in air conditioning systems that not only were a real benefit to the average person by the middle of the 20th century but also made possible technologies in fields ranging from medical and scientific research to space travel.

Prominent among air-conditioning pioneers was Willis Haviland Carrier. In 1902, Carrier, a recent graduate of Cornell University's School of Engineering, was working for the Buffalo Forge Company on heating and cooling systems. According to Carrier, one foggy night while waiting on a train platform in Pittsburgh he had a sudden insight into a problem he had been puzzling over for a while—the complex relationship between air temperature, humidity, and dew point. He realized that air could be dried by saturating it with chilled water to induce condensation. After a number of experimental air conditioning installations, he patented Dew Point Control in 1907, a device that, for the first time, allowed for the precise control of temperature and humidity necessary for sophisticated industrial processes. Carrier's early air conditioner was put to use right away by a Brooklyn printer who could not produce a good color image because fluctuations of heat and humidity in his plant kept altering the paper's dimensions and misaligning the colored inks. Carrier's system, which had the cooling power of 108,000 pounds of ice a day, solved the problem. That same principle today makes possible the billion-dollar facilities required to produce the microcircuits that are the backbone of the computer industry. Air conditioners were soon being used in a variety of industrial venues. The term itself was coined in 1906 by a man named Stuart Cramer, who had applied for a patent for a device that would add humidity to the air in his textile mill, reducing static electricity and making the textile fibers easier to work with. Air-conditioning systems also benefited a host of other businesses, enumerated by Carrier himself: "lithography, the manufacture of candy, bread, high explosives and photographic films, and the drying and preparing of delicate hygroscopic materials such as macaroni and tobacco." At the same time, it did not go unnoticed that workers in these air-conditioned environments were more productive, with significantly lower absentee rates. Comfort cooling, as it became known, might just be a profitable commodity in itself.

Carrier and others set out to explore the potential. In 1915 he and several partners formed the Carrier Engineering Corporation, which they dedicated to improving the technology of air conditioning. Among the key innovations was a more efficient centrifugal (as opposed to piston-driven) compressor, which Carrier used in the air conditioners he installed in Detroit's J. L. Hudson Department Store in 1924, the first department store so equipped. Office buildings soon followed.