A conventional solid-state diode will not let current flow if reverse-biased (up to a breakdown voltage). By exceeding the breakdown voltage a conventional diode is destroyed in the breakdown due to excess current and overheating. In case of forward-bias (in the direction of the arrow) the diode exhibits a voltage drop of roughly 0.7 volt. The voltage drop depends on the type of the diode.

A Zener diode exhibits almost the same properties, except the device is especially designed so as to have a greatly reduced breakdown voltage, the so-called Zener voltage. A Zener diode contains a heavily doped p-n junction allowing electrons to tunnel from the valence band of the p-type material to the conduction band of the n-type material. A reverse-biased Zener diode will exhibit a controlled breakdown and let the current flow to keep the voltage across the Zener diode at the Zener voltage. For example, a 3.2 volt Zener diode will exhibit a voltage drop of 3.2 volt if reverse biased. However, the current is not unlimited, so the Zener diode is typically used to generate a reference voltage for an amplifier stage.

The breakdown voltage can be controlled quite accurately in the doping process. Tolerances up to 0.05% are available though the most widely used tolerances are 5% and 10%.

The effect was discovered by the American physicist Clarence Melvin Zener.

Another mechanism that produces a similar effect is the avalanche effect as in the avalanche diode. The two types of diode are in fact constructed the same way and both effects are present in diodes of this type. In silicon diodes up to about 5.6 volts, the zener effect is the predominant effect and shows a marked negative temperature coefficient. Above 5.6 volts, the avalanche effect becomes predominant and exhibits a positive temperature coefficient.

In a 5.6 volt diode, the two effects occur together and their temperature coefficients neatly cancel each other out, thus the 5.6 volt diode is the part of choice in temperature critical applications.

Modern manufacturing techniques have produced devices with voltages lower than 5.6 volts with negligible temperature coefficients, but as higher voltage devices are encountered, the temperature coefficient rises dramatically. A 75 volt diode has 10 times the coefficient of a 12 volt diode.

All such diodes are usually marketed under the umbrella of 'zener diodes'.