This chapter considers the essential topics of microphones and loudspeakers. The polar or directional characteristics of transducers are their most important attribute and are treated before consideration of the operating principle. The chapter shows that polar characteristics assume even greater importance if the illusion of stereophony is to be made realistic. Whilst a microphone can in principle and in practice produce a very accurate measurement of the sound field approaching the point where it is located, the loudspeaker is not so fortunate. Loudspeakers usually approximate to a point source of sound and produce a sound field leaving that point. More often loudspeakers are used having such poor polar characteristics that the only remedy is to make the room highly absorbent so that the direct sound dominates. Stereophony works by creating differences in time of arrival of sound at the listener's ears. The stereophonic illusion only works properly if the two loudspeakers are producing in-phase signals.