Photodiodes are designed to enable light to strike them on their p-type sides. When light strikes this side, electrons and holes are created within the semiconductor in a photoelectric effect. Light of a short wavelength that strikes the photodiode is absorbed by the p-type layer, and the electrons created as a result are attracted to the n-type layer. Light of a long wavelength reaches the n-type layer, and the holes created as a result in the n-type layer are attracted to the p-type layer. In short, holes gather on the p-type side, which accumulates positive charge, while electrons gather on the n-type side, which accumulates negative charge. And because the circuit is reverse-biased, the electrical charges generated are unable to flow.

The brighter the light that hits the photodiode, the greater the electrical charge that will accumulate within it. This accumulation of electrical charge at the junction of the pn pair when light strikes is known as a photovoltaic effect. Photodiodes are basically devices that make use of such photovoltaic effects to convert light into electrical charge, which accumulates in direct proportion to the strength of the light striking them. Photodiodes are also at work in our everyday lives in such devices as infrared remote control sensors and camera exposure meters.