Octane is a measure of a fuels ability to resist "knocking" or "pinging" during combustion, caused by the air/fuel mixture detonating prematurely in the engine. The higher the octane rating, the more stable the fuel, and the less likely it is to pre-ignite at higher pressures and damage the engine. Octane ratings are measures of fuel stability based on the pressure at which a fuel will spontaneously combust (auto-ignite) in a testing engine. The octane number is actually the simple average of two different octane rating methods—motor octane rating (MOR) and research octane rating (RON)—that differ primarily in the specifics of the operating conditions. The higher an octane number, the more compression the fuel can withstand before detonating.

Octanes are a family of hydrocarbons that are typical components of gasoline. They are colorless liquids that boil around 125 °C (260 °F), and one member of the octane family, iso-octane, is used as a reference standard to benchmark the tendency of gasoline or LPG fuels to resist self-ignition. The octane rating of gasoline is measured in a test engine and is defined by comparison with the mixture of 2,2,4-trimethylpentane (iso-octane) and normal heptane that would have the same anti-knocking capability as the fuel under test. For example, gasoline with the same knocking characteristics as a mixture of 90% iso-octane and 10% heptane would have an octane rating of 90.

Higher octane fuels are often required or recommended for engines that use a higher compression ratio and/or use supercharging or turbocharging to force more air into the engine. Increasing pressure in the cylinder allows an engine to extract more mechanical energy from a given air/fuel mixture but requires higher octane fuel to keep the mixture from pre-detonating. In these engines, high octane fuel will improve performance and fuel economy. However, the fuel components that boost octane are generally more expensive to produce. If a vehicle requires midgrade or premium fuel, it is worth the extra cost, but if the owners manual says the vehicle doesnt require premium but will run better on higher octane fuel, its up to the driver to decide if the cost increase is worth the fuel savings.