This term (Set-top box) describes a specialised computer which translates incoming digital signals into a form suitable for viewing on a standard television set. The source of the signals could be a digital satellite or terrestrial broadcast, a cable television channel or a video-on-demand programme sent down a telephone line.

Set-top box, sometimes abbreviated to set-top or STB, is a somewhat misleading term as the device is not necessarily placed on top of the television set and is not necessarily a box.

Other projected uses for the set-top box include control of interactive viewing, for example with a home-shopping channel or WebTV; it may also decrypt signals on subscription or pay-per-view channels. The term is an obvious compound, helped towards acceptance by its form and rhythm, even though, as one commentator remarked, it is normally found under the set rather than on top of it.

Set-top boxes may be associated with these major categories:

(1) Broadcast TV Set-top Boxes - The more elementary level set-top box with no back channel (return channel.) These might however come with some memory, interface ports and some processing power. (2) Enhanced TV Set-top Boxes - These have a back channel (return channel), often through a phone line, and are the mainstay of today's set-top boxes. These are capable of Video on Demand, e-commerce, Internet browsing, e-mail communications, chat and more. They are giving way to the next category. (3) Advanced Set-top Boxes - A fully integrated set-top box. These have good processors, memory and optional large hard-drives. They're often used with high-speed connections. Advanced set-top boxes are more likely to be integrated with DVRs and high-definition TV oriented functionality. See Media Centers. (4) All-in-one Set-top Boxes - A fully integrated set-top box. Features could include high-speed Internet access, iTV, digital video recording & gaming. Instead of this, a "sidecar" might be used in tandem by the subscriber's original set top box and/or TV. See Media Centers. (5) Sidecar - This type of set-top box provides an additional transport stream of data from the network operator (content provider,) to compliment the original stream that's being received by the subscriber via their original set-top box. With Charter Communications', the BMC-8000 (Broadband Media Center) is/was a sidecar box that works in tandem with the Motorola DCT-2000. A fully integrated unit would not require a Sidecar. (6) Hybrid Digital Cable BoxA specialized and often more expensive Cable TV set-top box with high end functions. Motorola Broadband's DCP501 home theater system is/was an example. It also has a DVD player.