For most industrial and manufacturing uses, there are two main types of air compressors to consider:

Reciprocating compressors - In these machines, also known as piston-driven compressors, pistons compress the air in a cylinder and force it into a high-pressure storage tank. Piston-driven machines are the oldest and most affordable type of air compressor, and are most commonly found in portable applications or home workshops.

Rotary screw air compressors - Instead of using pistons, rotary screw compressors use twin screws, like two oversized drill bits next to each other, to force air up into higher pressures. Until recently, rotary screw compressors were considerably more expensive than reciprocating models - now, prices are becoming more and more competitive.

Both types are available in two-stage models that compress the air a second time to allow for increased pressure and air flow.

An important way to decide between these two is to consider whether your application is continuous use or intermittent. A nail gun, firing a burst of air every few seconds, is an intermittent tool, while a spray painter is used continuously. If your application calls for continuous use, you'll want a rotary compressor.

That's due to the rated "duty cycle:" the amount of time each hour that a compressor is able to work. A duty cycle of 75% means the air compressor needs to rest for 15 minutes out of every hour to cool down. Rotary compressors have a duty cycle of 100%, thanks to fewer moving parts and robust oil cooling systems. In contrast, reciprocating compressors are designed to run only part of the time.

Centrifugal compressors
A third major type is the centrifugal compressor. These high-end compressors are essentially turbine engines: they use rotating blades to create high pressure. They are almost exclusively used in power plants and huge industrial applications, simply because they begin to become economically competitive at a scale well beyond that of most users.