Online chat is a way of communicating by sending text messages to people in the same chat-room in real-time. Some chat rooms such as Yahoo! use both text and voice simultaneously. The oldest form of true chat rooms are the text-based variety.

Visual chat rooms add graphics to the chat experience, in either 2D or 3D (employing virtual reality technology).These are characterized by using a graphic representation of the user (avatar) that can be moved about a graphic background or in a graphic environment. These virtual worlds are capable of incorporating elements such as games (in particular massively multiplayer online games) and educational material most often developed by individual site owners, who in general are simply more advanced users of the systems. The most popular environments also allow users to create or build their own spaces.

Some visual chat rooms also incorporate audio and video communications, so that users may actually see and hear each other.

The primary use of a chat room is to share information via text with a group of other users. Generally speaking, the ability to converse with multiple people in the same conversation differentiates chat rooms from instant messaging programs, which are more typically designed for one-to-one communication. The users in a particular chat room are generally connected via a shared interest or other similar connection, and chat rooms exist catering for a wide range of subjects. New technology has enabled the use of file sharing and webcams to be included in some programs.

Some people who visit chat rooms use them as a place to experience online sex, also known as cybersex or computer love. While not physically able to see their partner, users derive stimulation from descriptive text.

Many Internet chat and messaging services allow users to display or send each other photos of themselves and users may chose to exchange nude or sexual photos. This has led to widespread concern about the potential for the sexual exploitation of minors. Minors who take sexually suggestive or explicit digital photos of themselves and share such photos with others have even been prosecuted under child-pornography statutes.

Games are also often played in chat rooms. A historic example is Hunt the Wumpus.

Chat rooms usually have stringent rules that they require users to follow in order to maintain integrity and safety for their users. Particularly in rooms for children, rules usually do not allow users to use offensive language, or to promote hate mail, violence and other negative issues. Also chat rooms often do not allow advertising in their rooms or flooding, which is continually filling the screen with repetitive text. Typing with caps lock on is usually considered shouting and is discouraged.

Sometimes chat room venues are moderated either by limiting who is allowed to speak (not common), by having comments be approved by moderators (often presented as asking questions of a guest or celebrity), or by having moderation volunteers patrol the venue watching for disruptive or otherwise undesirable behaviour.

Yet, most commonly used chat rooms are not moderated and users may type what they personally choose to send.