An atomic clock works like a conventional clock but the time-base of the clock, instead of being an oscillating mass as in a pendulum clock, is based on the properties of atoms when transitioning between different energy states.

An atom, when excited by an external energy source, goes to a higher energy state. Then, from this state, it goes to a lower energy state. In this transition, the atom releases energy at a very precise frequency which is characteristic of the type of atom. This is like a signature for the type of material used. All that is needed for making a good clock is a way of detecting this frequency and using it as an input to a counter. This is the principle behind an atomic clock.