Active tags may be broadly operated in one of two operational modes: as transponders and/or as beacons. Active transponders are awakened when they receive a signal from a reader. Popular applications are in toll payment collection, checkpoint control and other choke-point systems. For example when a car with an active transponder approaches a tollbooth, a reader at the booth sends out a signal that activates the transponder on the car windshield. The transponder then transmits its unique ID to the reader. In this manner, transponders conserve battery life by enabling the tag to send a signal only when it is within range of a reader.

Active beacons are utilized in real-time locating systems (RTLS) that cannot accommodate choke points. A beacon emits a signal with its unique identifier at pre-set intervals, for example, once every second, every minute, every hour, or several times per day, depending on the urgency of the location tracking application.

Active tags can be read reliably because they transmit (rather than reflect) a signal to the reader. Read ranges of 100 meters (greater than 300-feet) is common, but range often depends on the antenna type, environmental factors, and regulatory constraints. Active tags can cost from $10 to a few hundred dollars, depending on their capability, amount of memory, battery life, and integrated sensor functionality.