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After Effects uses a system of layers organized on a timeline to create composites from still images and motion footage, such as video files. Properties such as position and opacity can be controlled independently for each layer, and each layer can have effects applied. After Effects is often described as the "Photoshop of video", because its flexibility allows compositors to alter video in any way they see fit, as Photoshop does for images.

Although After Effects can create images of its own, it is generally used to composite material from other sources to make moving graphics (also known as motion graphics). For example, with a picture of a space ship and a picture of a star background, After Effects could be used to place the ship in front of the background and animate it to move across the stars.

The main interface consists of several panels (windows in versions prior to After Effects 7.0). Three of the most commonly used panels are the Project panel, the Composition panel, and the Timeline panel. The Project panel acts as a bin to import stills, video, and audio footage items. Footage items in the Project panel are used in the Timeline panel, where layer order and timing can be adjusted. The items visible at the current time marker are displayed in the Composition panel.