A thermodynamic system is a body of matter and/or radiation separate from its surroundings that can be studied using the laws of thermodynamics.

Thermodynamic systems can be passive and active according to internal processes. According to internal processes, passive systems and active systems are distinguished: passive, in which there is a redistribution of available energy, active, in which one type of energy is converted into another.

Depending on its interaction with the environment, a thermodynamic system may be an isolated system, a closed system, or an open system. An isolated system does not exchange matter or energy with its surroundings. A closed system may exchange heat, experience forces, and exert forces, but does not exchange matter. An open system can interact with its surroundings by exchanging both matter and energy.

The physical condition of a thermodynamic system at a given time is described by its state, which can be specified by the values of a set of thermodynamic state variables. A thermodynamic system is in thermodynamic equilibrium when there are no macroscopically apparent flows of matter or energy within it or between it and other systems.

Thermodynamic equilibrium is characterized not only by the absence of any flow of mass or energy, but by "the absence of any tendency toward change on a macroscopic scale."

Equilibrium thermodynamics, as a subject in physics, considers macroscopic bodies of matter and energy in states of internal thermodynamic equilibrium. It uses the concept of thermodynamic processes, by which bodies pass from one equilibrium state to another by transfer of matter and energy between them. The term 'thermodynamic system' is used to refer to bodies of matter and energy in the special context of thermodynamics. The possible equilibria between bodies are determined by the physical properties of the walls that separate the bodies. Equilibrium thermodynamics in general does not measure time. Equilibrium thermodynamics is a relatively simple and well settled subject. One reason for this is the existence of a well defined physical quantity called 'the entropy of a body'.

Non-equilibrium thermodynamics, as a subject in physics, considers bodies of matter and energy that are not in states of internal thermodynamic equilibrium, but are usually participating in processes of transfer that are slow enough to allow description in terms of quantities that are closely related to thermodynamic state variables. It is characterized by presence of flows of matter and energy. For this topic, very often the bodies considered have smooth spatial inhomogeneities, so that spatial gradients, for example a temperature gradient, are well enough defined. Thus the description of non-equilibrium thermodynamic systems is a field theory, more complicated than the theory of equilibrium thermodynamics. Non-equilibrium thermodynamics is a growing subject, not an established edifice. Example theories and modeling approaches include the GENERIC formalism for complex fluids, viscoelasticity, and soft materials. In general, it is not possible to find an exactly defined entropy for non-equilibrium problems. For many non-equilibrium thermodynamical problems, an approximately defined quantity called 'time rate of entropy production' is very useful. Non-equilibrium thermodynamics is mostly beyond the scope of the present article.

Another kind of thermodynamic system is considered in most engineering. It takes part in a flow process. The account is in terms that approximate, well enough in practice in many cases, equilibrium thermodynamical concepts. This is mostly beyond the scope of the present article, and is set out in other articles, for example the article Flow process.