For fluid power, a working fluid is a gas or liquid that primarily transfers force, motion, or mechanical energy. In hydraulics, water or hydraulic fluid transfers force between hydraulic components such as hydraulic pumps, hydraulic cylinders, and hydraulic motors that are assembled into hydraulic machinery, hydraulic drive systems, etc. In pneumatics, the working fluid is air or another gas which transfers force between pneumatic components such as compressors, vacuum pumps, pneumatic cylinders, and pneumatic motors. In pneumatic systems, the working gas also stores energy because it is compressible. (Gases also heat up as they are compressed and cool as they expand. Some gases also condense into liquids as they are compressed and boil as pressure is reduced.)

For passive heat transfer, a working fluid is a gas or liquid, usually called a coolant or heat transfer fluid, that primarily transfers heat into or out of a region of interest by conduction, convection, and/or forced convection (pumped liquid cooling, air cooling, etc.).

The working fluid of a heat engine or heat pump is a gas or liquid, usually called a refrigerant, coolant, or working gas, that primarily converts thermal energy (temperature change) into mechanical energy (or vice versa) by phase change and/or heat of compression and expansion. Examples using phase change include water↔steam in steam engines, and refrigerants in vapor-compression refrigeration and air conditioning systems. Examples without phase change include air or hydrogen in hot air engines such as the Stirling engine, air or gases in gas-cycle heat pumps, etc. (Some heat pumps and heat engines use "working solids", such as rubber bands, for elastocaloric refrigeration or thermoelastic cooling and nickel titanium in a prototype heat engine.)

Working fluids other than air or water are necessarily recirculated in a loop. Some hydraulic and passive heat-transfer systems are open to the water supply and/or atmosphere, sometimes through breather filters. Heat engines, heat pumps, and systems using volatile liquids or special gases are usually sealed behind relief valves.

The working fluid's properties are essential for the full description of thermodynamic systems. Although working fluids have many physical properties which can be defined, the thermodynamic properties which are often required in engineering design and analysis are few. Pressure, temperature, enthalpy, entropy, specific volume, and internal energy are the most common.

If at least two thermodynamic properties are known, the state of the working fluid can be defined. This is usually done on a property diagram which is simply a plot of one property versus another.

When the working fluid passes through engineering components such as turbines and compressors, the point on a property diagram moves due to the possible changes of certain properties. In theory therefore it is possible to draw a line/curve which fully describes the thermodynamic properties of the fluid. In reality however this can only be done if the process is reversible. If not, the changes in property are represented as a dotted line on a property diagram. This issue does not really affect thermodynamic analysis since in most cases it is the end states of a process which are sought after.

The working fluid can be used to output useful work if used in a turbine. Also, in thermodynamic cycles energy may be input to the working fluid by means of a compressor. The mathematical formulation for this may be quite simple if we consider a cylinder in which a working fluid resides. A piston is used to input useful work to the fluid. From mechanics, the work done from state 1 to state 2 of the process is given by: