A cofactor is a non-protein chemical compound or metallic ion that is required for an enzyme's role as a catalyst (a catalyst is a substance that increases the rate of a chemical reaction). Cofactors can be considered "helper molecules" that assist in biochemical transformations. The rates at which these happen are characterized in an area of study called enzyme kinetics. Cofactors typically differ from ligands in that they often derive their function by remaining bound.

Cofactors can be classified into two types: inorganic ions and complex organic molecules called coenzymes. Coenzymes are mainly derived from vitamins and other organic essential nutrients in small amounts (some definitions limit the use of the term "cofactor" for inorganic substances; both types are included here).

Coenzymes are further divided into two types. The first is called a "prosthetic group", which consists of a coenzyme that is tightly (or even covalently and, therefore, permanently) bound to a protein. The second type of coenzymes are called "cosubstrates", and are transiently bound to the protein. Cosubstrates may be released from a protein at some point, and then rebind later. Both prosthetic groups and cosubstrates have the same function, which is to facilitate the reaction of enzymes and proteins. An inactive enzyme without the cofactor is called an apoenzyme, while the complete enzyme with cofactor is called a holoenzyme.^{[page needed]}

The International Union of Pure and Applied Chemistry (IUPAC) defines "coenzyme" a little differently, namely as a low-molecular-weight, non-protein organic compound that is loosely attached, participating in enzymatic reactions as a dissociable carrier of chemical groups or electrons; a prosthetic group is defined as a tightly bound, nonpolypeptide unit in a protein that is regenerated in each enzymatic turnover.

Some enzymes or enzyme complexes require several cofactors. For example, the multienzyme complex pyruvate dehydrogenase at the junction of glycolysis and the citric acid cycle requires five organic cofactors and one metal ion: loosely bound thiamine pyrophosphate (TPP), covalently bound lipoamide and flavin adenine dinucleotide (FAD), cosubstrates nicotinamide adenine dinucleotide (NAD⁺) and coenzyme A (CoA), and a metal ion (Mg²⁺).

Organic cofactors are often vitamins or made from vitamins. Many contain the nucleotide adenosine monophosphate (AMP) as part of their structures, such as ATP, coenzyme A, FAD, and NAD⁺. This common structure may reflect a common evolutionary origin as part of ribozymes in an ancient RNA world. It has been suggested that the AMP part of the molecule can be considered to be a kind of "handle" by which the enzyme can "grasp" the coenzyme to switch it between different catalytic centers.

Cofactors can be divided into two major groups: organic cofactors, such as flavin or heme; and inorganic cofactors, such as the metal ions Mg²⁺, Zn²⁺, Cu⁺, Mn²⁺ and iron–sulfur clusters.

Organic cofactors are sometimes further divided into coenzymes and prosthetic groups. The term coenzyme refers specifically to enzymes and, as such, to the functional properties of a protein. On the other hand, "prosthetic group" emphasizes the nature of the binding of a cofactor to a protein (tight or covalent) and, thus, refers to a structural property. Different sources give slightly different definitions of coenzymes, cofactors, and prosthetic groups. Some consider tightly bound organic molecules as prosthetic groups and not as coenzymes, while others define all non-protein organic molecules needed for enzyme activity as coenzymes, and classify those that are tightly bound as coenzyme prosthetic groups. These terms are often used loosely.