Many people using multi-color flow cytometry do not understand what compensation is, when it is needed, or how it should be applied. The author provides a clear explanation of the nature of compensation, the factors that affect compensation values, and the effect of compensation on data visualization. Both hardware and software compensation are covered. Although the subject is treated from a mathematical perspective, the manner of presentation is very straightforward. The unit discusses appropriate controls and protocols to check compensation settings, as well as introducing the concept of fluorescence-minus-one gates. Many example figures are supplied to give the reader a clear indication of how the author believes compensation should be handled.