Any appliance that takes heat from one area and moves it to another is a heat pump.
Most heat pump installations involve what is called a split system. The outdoor unit contains the compressor and a heat exchanger, called a coil. The indoor unit contains another coil, a fan that blows air through your duct system, grille, and electric heating elements.
The outdoor and indoor units are connected by copper tubes that move a gas refrigerant (such as Freon) between the indoor and outdoor coils. This refrigerant has the ability to absorb heat from the air, even at very low temperatures.
In the winter, the refrigerant absorbs heat from outdoor air drawn across the outdoor coil. The refrigerant becomes hot but is made even hotter (in excess of 140 degrees F) by going through the compressor.
This hot gas travels through a copper tube to the indoor coil. The fan draws air through your return grille and pushes the air across the indoor coil. The hot gas transfers its heat to the air blown across the coil and into the duct system.
In the summer, your heat pump simply reverses the flow of refrigerant. Now the refrigerant absorbs heat from room air blown across the indoor coil. In this manner, heat and humidity are removed from the air, and cool, dry air is distributed throughout your home.
The absorbed heat is carried by the refrigerant through the copper tube to the outdoor unit. Here the refrigerant goes through the compressor, then moves through the outdoor coil, which transfers the absorbed heat to the outdoor air.