An octane rating, or octane number, is a standard measure of a fuel's ability to withstand compression in an internal combustion engine without causing engine knocking. The higher the octane number, the more compression the fuel can withstand before detonating. Octane rating does not relate directly to the power output or the energy content of the fuel per unit mass or volume, but simply indicates the resistance to detonating under pressure without a spark.

Whether a higher octane fuel improves or impairs an engine's performance depends on the design of the engine. In broad terms, fuels with a higher octane rating are used in higher-compression gasoline engines, which may yield higher power for these engines. The added power in such cases comes from the way the engine is designed to compress the air/fuel mixture, and not directly from the rating of the gasoline.

In contrast, fuels with lower octane (but higher cetane numbers) are ideal for diesel engines because diesel engines (also called compression-ignition engines) do not compress the fuel, but rather compress only air, and then inject fuel into the air that was heated by compression. Gasoline engines rely on ignition of compressed air and fuel mixture, which is ignited only near the end of the compression stroke by electric spark plugs. Therefore, being able to compress the air/fuel mixture without causing detonation is important mainly for gasoline engines. Using gasoline with lower octane than an engine is built for may cause engine knocking and/or pre-ignition.

The octane rating of aviation gasoline was extremely important in determining aero engine performance in the aircraft of World War II. The octane rating affected not only the performance of the gasoline, but also its versatility; the higher octane fuel allowed a wider range of lean to rich operating conditions.

In spark ignition internal combustion engines, knocking (also knock, detonation, spark knock, pinging, or pinking) occurs when combustion of some of the air/fuel mixture in the cylinder does not result from propagation of the flame front ignited by the spark plug, but when one or more pockets of air/fuel mixture explode outside the envelope of the normal combustion front. The fuel-air charge is meant to be ignited by the spark plug only, and at a precise point in the piston's stroke. Knock occurs when the peak of the combustion process no longer occurs at the optimum moment for the four-stroke cycle. In a simple explanation, the forward moving wave of combustion that burns the hydrocarbon + oxygen mixture inside the cylinder like a wave that a surfer would wish to surf upon is violently disrupted by a secondary wave that has started elsewhere. The shock wave of these two separate waves creates the characteristic metallic "pinging" sound, and cylinder pressure increases dramatically. Effects of engine knocking range from inconsequential (incremental heating plus power loss) to completely destructive (detonation while one of the valves is still open).

Knocking should not be confused with pre-ignition – they are two separate events with pre-ignition occurring before the combustion event. However, pre-ignition is highly correlated with knock because knock will cause rapid heat increase within the cylinder eventually leading to destructive pre-detonation.

Most engine management systems commonly found in automobiles today, typically electronic fuel injection (EFI), have a knock sensor that monitors if knock is being produced by the fuel being used. In modern computer-controlled engines, the ignition timing will be automatically altered by the engine management system to reduce the knock to an acceptable level.

Octanes are a family of hydrocarbons that are typical components of gasoline. They are colorless liquids that boil around 125 °C (260 °F). One member of the octane family, 2,2,4-Trimethylpentane (iso-octane), is used as a reference standard to benchmark the tendency of gasoline or LPG fuels to resist self-ignition.