The Lava Lamp consists of an illuminating bulb, a glass bottle containing a transparent oil and translucent wax (although other combinations may be used), and a metallic wire coil. The glass bottle sits on top of the bulb, which heats its contents. The metallic wire coil is hidden in the base of the lamp, on which the glass bottle is sitting.

The wax is slightly denser than the oil at room temperature, and slightly less dense than the oil under marginally warmer conditions. This happens because the wax expands more than the oil when heated.

When the lava lamp is turned on, the light bulb heats the bottom of the glass bottle and the metallic wire coil, which in turn heats the contents of the glass bottle in this vicinity.

Wax at the bottom heats until it melts, and eventually becomes less dense than the liquid above it. At this time, a portion of the wax rises towards the top of the container. Near the top, away from the heat source, the wax cools, contracts, and as its density increases it begins to fall through the liquid towards the bottom of the container again. This is a macroscopic, visible form of convection heat transfer, although it also occurs on a molecular scale within the liquid itself. The difference in temperature between the top and bottom of the globe is only a few degrees.