(courtesy of Applied Sensor Technology)
Thermocouples operate on the "Seebeck Effect", which is the phenomena whereby two dissimilar metal conductors (wires), joined at two points, with one point kept at a known constant temperature, produce a measurable voltage difference between the two conductors.
Thermocouple types - such a type J, type K, type R, and type S - refer to the alloy combinations used for the conductors and are based on standardized color designations.
Thermocouples are used widely in industrial processes in industries such as power generation, primary metals, pulp and paper, petro-chemical, and OEM equipment. They can be fabricated in protective wells, and can be housed in general purpose, water-tight, or explosion-proof housings.
The following video provides a basic visual understanding of thermocouple wire, how a T/C junction is determined, and also discusses thermocouple connectors, polarity and some aspects of construction (such as grounded vs. ungrounded vs. open tip).