MOdulator-DEModulator.... A communication device that modulates (varies ,changes or alters) analog signal for encoding digital data. Transmitting it,it then demodulates (decodes)that data. In other words it takes digital information (from the computer)and changes (modulates) it to analog for communication with the wire system of the telephone lines. It then at the next modem changes(demodulates) it back to a digital signal to complet the transmission. Also see cable modem.