A three-way touch lamp is much like a simple touch lamp—it detects your touch by applying a high frequency alternating charge to the lamp's surfaces and uses this fluctuating charge to measure the lamp's electric capacitance—the ease with which charge can moved on or off the lamp's surfaces. When you touch the lamp, the lamp's capacitance changes and the lamp's electronics detect this change.

In a three-way touch lamp, the lamp's electronics control 4 different light levels alternately: dim, medium, bright, and off. How these light levels are obtained depends on the lamp. If the lamp uses a three-way light bulb, which contains two separate filaments, then it can obtain the 3 brightness levels by turning on one or both of the filaments. It uses just the small filament for dim, just the large filament for medium, and both filaments for bright. That's exactly what a normal three-way lamp does.

But if the lamp uses a normal bulb and obtains three light levels from it, then it uses the same technique as a dimmer switch. In this technique, an electronic switching device called a triac is used to limit the times during which electric current can flow through the bulb and deliver power to it. In the bright setting, the triac permits current to flow through the bulb at all times and the bulb appears as bright as possible. But in the dim or medium settings, the triac prevents current from flowing at certain times. The triac takes advantage of the fact that the power flowing through a household lamp is alternating current—current that reverses directions 120 times a second (in the United States) for a total of 60 full cycles of reversal, over and back, each second (60 Hz). At the beginning of each current reversal, the electronic devices that control the triac start a timer. This timer allows those devices to wait a certain amount of time before they trigger the triac and allow it to begin carrying current to the light bulb. Once triggered, the triac will allow current to flow through the bulb until the next reversal of current in the power line. Thus the amount of energy that reaches the bulb during each half-cycle of the power line depends on how long the electronic devices wait before triggering the triac. The longer they wait, the less energy will reach the bulb and the dimmer it will glow. In the bright setting, the triac is triggered immediately after each current reversal so that power always flows to the bulb and it glows brightly. But in the medium and dim settings, the triac is triggered well into the half-cycle that follows the reversal. A normal dimmer gives you complete control over this delay, but a three-way touch switch only provides three preset delays. The medium setting has a medium delay while the dim setting has a long delay.

An incandescent light bulb works by heating a solid filament so hot that the filament's thermal radiation spectrum includes large amounts of visible light. A fluorescent tube uses an electric discharge in mercury vapor to produce ultraviolet light, which is then transformed into visible light by fluorescent phosphors on the inner surface of the tube. A gas discharge lamp uses an electric discharge in a gas inside that lamp (often high pressure mercury, or sodium vapor, or even neon) to produce visible light directly.

In a common incandescent light bulb, an electric current flows through a double-spiral coil of very thin tungsten wire. As the electric charges in the current flow through this tungsten filament, they collide periodically with the tungsten atoms and transfer energy to those tungsten atoms. The current gives up its energy to the tungsten filament and the filament's temperature rises to about 2500° C. While all objects emit thermal radiation, very hot objects emit some of the thermal radiation as visible light. A 2500° C object emits about 12% of its heat as visible light and this is the light that you see coming from the bulb. Most of the remaining heat emerges from the bulb as invisible infrared light or "heat" light. The glass enclosure shields the filament from oxygen because tungsten burns in air.

A three-way light bulb has two filaments inside it. One filament is smaller than the other, consuming less electricity and emitting less light. At the low light setting, only the smaller filament has current running through it and the bulb emits a dim light. At the medium light setting, only the larger filament has current running through it and the bulb emits a medium light. At the high light setting, both filaments have currents running through them and the bulb emits a bright light. To control the two filaments, the bulb has three electrical connections. The two filaments share one of the connection and each has one additional connection of its own. A complicated switch in the lamp determines whether to deliver current to one filament or the other or both. In each case, current flows toward the filament through one connection and returns from the filament through the other connection.