When the Sun is low above the horizon, sunlight rays must penetrate the atmosphere for a greater distance, reducing the intensity of the direct light, so that more of the illumination comes from indirect light from the sky (Thomas 1973, 9–13), reducing the lighting ratio. This is technically a type of lighting diffusion. More blue light is scattered, so if the Sun is present, its light appears more reddish. In addition, the Sun's low angle above the horizon produces longer shadows.

The term hour is used figuratively; the effect has no clearly defined duration and varies according to season and latitude. The character of the lighting is determined by the sun's altitude, and the time for the Sun to move from the horizon to a specified altitude depends on a location's latitude and the time of year (Bermingham 2003, 214). In Los Angeles, California, at an hour after sunrise or an hour before sunset, the sun has an altitude of about 10–12. For a location closer to the Equator, the same altitude is reached in less than an hour, and for a location farther from the equator, the altitude is reached in more than one hour. For a location sufficiently far from the equator, the Sun may not reach an altitude of 10, and the golden hour lasts for the entire day in certain seasons.

In the middle of the day, the bright overhead Sun can create strong highlights and dark shadows. The degree to which overexposure can occur varies because different types of film and digital cameras have different dynamic ranges. This harsh lighting problem is particularly important in portrait photography, where a fill flash is often necessary to balance lighting across the subject's face or body, filling in strong shadows that are usually considered undesirable.

Because the contrast is less during the golden hour, shadows are less dark, and highlights are less likely to be overexposed. In landscape photography, the warm color of the low Sun is often considered desirable to enhance the colours of the scene. It is the best time of day for any type of photography since the light is properly diffused and warm.