Fuel rods containing Uranium-235 fission, releasing heat. Water aborbs the heat. Heat is used to boil water producing steam, steam pressure drives electric generators.

"Reactor: The reactor is used to convert nuclear (inaccurately also known as 'atomic') energy into heat. While a reactor could be one in which heat is produced by fusion or radioactive decay, this description focuses on the basic principles of the fission reactor. - Fission: When a relatively large fissile atomic nucleus (usually uranium-235, plutonium-239 or plutonium-241) absorbs a neutron it is likely to undergo nuclear fission. The original heavy nucleus splits into two or more lighter nuclei, releasing kinetic energy, gamma radiation and free neutrons; collectively known as fission products. A portion of these neutrons may later be absorbed by other fissile atoms and trigger further fission events, which release more neutrons, and so on. The nuclear chain reaction can be controlled by using neutron poisons and neutron moderators to change the portion of neutrons that will go on to cause more fissions. In nuclear engineering, a neutron moderator is a medium which reduces the velocity of fast neutrons, thereby turning them into thermal neutrons capable of sustaining a nuclear chain reaction involving uranium-235. Commonly used moderators include regular (light) water (75% of the world's reactors), solid graphite (20% of reactors) and heavy water (5% of reactors). Beryllium has also been used in some experimental types, and hydrocarbons have been suggested as another possibility. Increasing or decreasing the rate of fission will also increase or decrease the energy output of the reactor. - Heat Generation: The reactor core generates heat in a number of ways: The kinetic energy of fission products is converted to thermal energy when these nuclei collide with nearby atoms. Some of the gamma rays produced during fission are absorbed by the reactor in the form of heat. Heat produced by the radioactive decay of fission products and materials that have been activated by neutron absorption. This decay heat source will remain for some time even after the reactor is shutdown. The heat power generated by the nuclear reaction is 1,000,000 times that of the equal mass of coal. - Cooling: A cooling source - often water but sometimes a liquid metal - is circulated past the reactor core to absorb the heat that it generates. The heat is carried away from the reactor and is then used to generate steam. Most reactor systems employ a cooling system that is physically separate from the water that will be boiled to produce pressurized steam for the turbines, like the pressurized water reactor. But in some reactors the water for the steam turbines is boiled directly by the reactor core, for example the boiling water reactor." "The key components common to most types of nuclear power plants are: Nuclear fuel Nuclear reactor core Neutron moderator Neutron poison Coolant (often the Neutron Moderator and the Coolant are the same, usually both purified water) Control rods Reactor vessel Boiler feedwater pump Steam generators (not in BWRs) Steam turbine Electrical generator Condenser Cooling tower (not always required) Radwaste System (a section of the plant handling radioactive waste) Refueling Floor Spent fuel pool Reactor Protective System (RPS) Emergency Core Cooling Systems (ECCS) Standby Liquid Control System (emergency boron injection, in BWRs only) Containment building Control room Emergency Operations Facility" Source and further information: http://en.wikipedia.org/wiki/Nuclear_reactor