The rotor, too, consists of numerous thin steel laminations clamped together to form a cylinder. In the rotor, however, the slots run axially along the exterior of the cylinder, and each slot contains a bar made of copper or aluminum. These bars are connected at both ends to conductive rings, so that all the bars are short-circuited. (Without the laminations, the assembly resembles an exercise wheel for small animals, which is why AC induction motors are often called squirrel cage motors.)

The rotor slots are parallel to each other, but are not parallel to the shaft. Instead, they are skewed. This helps the motor run quietly by reducing magnetic hum and decreasing slot harmonics. It also keeps the rotor from remaining locked under the stator teeth due to magnetic attraction.

When AC power is applied to the stator windings, it creates a magnetic field. Because the current continuously changes direction and amplitude, the magnetic field continuously changes in strength and polarity. A voltage is induced in the rotor bars as they are cut by the magnetic flux. The induced voltage produces current that circulates in a loop through the bars and around the rings, creating magnetic fields around each bar. The rotor thus becomes an electromagnet, with alternating north and south poles, that spins to follow the rotating magnetic field in the stator.

The speed at which the magnetic field rotates is called the synchronous speed of the motor. The synchronous speed is the upper limit of the motor's speed. It is determined by the number of poles in the stator and the frequency of the AC power. When running, the rotor always turns at a slower speed than the magnetic field. This speed difference, or slip, is expressed as a percentage of the synchronous speed. An increase in load will cause the rotor to slow down, or increase slip. A decrease in load will cause the rotor to speed up, or decrease slip. With no load, slip is typically less than 0.1 percent. At full load, slip rarely exceeds 0.5 percent for large motors or 5 percent for small motors.

There are two main types of AC induction motor: single-phase and three-phase. A single-phase AC motor has only one main stator winding and operates on single-phase AC power. Single-phase AC motors are not self-starting and need help to get the rotor turning. In most cases, this help comes from an auxiliary stator winding, called the start winding, which is connected to the power source by a centrifugal switch, a capacitor, or both. Once the rotor begins turning, the centrifugal switch opens and de-energizes the start winding.

While most appliances use single-phase induction motors, industrial applications typically require three-phase motors. A three-phase AC motor has three main stator windings and operates on three-phase AC power. Three-phase motors are self-starting and can produce a large initial torque. AC induction motors for industrial applications range in size from 1 to 100,000 hp.

Most three-phase motors have squirrel cage rotors, but they can also have wound rotors. In the latter, the stator is the same as that of a squirrel cage motor. However, the rotor has a set of windings that are not short-circuited, but are instead terminated to a set of slip rings. This type of motor is ideal for very high inertia loads, where it is necessary to generate maximum torque at low speeds and accelerate to full speed quickly with minimal current draw.