Rule-based systems differ from standard procedural or object-oriented programs in that there is no clear order in which code executes. Instead, the knowledge of the expert is captured in a set of rules, each of which encodes a small piece of the expert's knowledge. Each rule has a left hand side and a ride hand side. The left hand side contains information about certain facts and objects which must be true in order for the rule to potentially fire (that is, execute). Any rules whose left hand sides match in this manner at a given time are placed on an agenda. One of the rules on the agenda is picked (there is no way of predicting which one), and its right hand side is executed, and then it is removed from the agenda. The agenda is then updated (generally using a special algorithm called the Rete algorithm), and a new rules is picked to execute. This continues until there are no more rules on the agenda.

The advantage to this type of approach, as opposed to a procedural approach, is that if the system is designed well, then the expert's knowledge can be maintained fairly easily, just by altering whichever rules need to be altered. Indeed, many rule-based systems come along with a rules editor which allows for rules to be easily maintained by non-technical people.

Rule-based systems are used extensively in applications such as mortgages, credit card authorization, fraud detection, e-commerce, and personalization.