The origins and effects of loss in turbomachines are discussed with the emphasis on trying to understand the physical origins of loss rather than on reviewing the available prediction methods. Loss is defined in terms of entropy increase and the relationship of this to the more familiar loss coefficients is derived and discussed. The sources of entropy are, in general: viscous effects in boundary layers, viscous effects in mixing processes, shock waves, and heat transfer across temperature differences. These are first discussed in general and then the results are applied to turbomachinery flows. Understanding of the loss due to heat transfer requires some discussion of cycle thermodynamics. Sections are devoted to discussing blade boundary layer and trailing edge loss, tip leakage loss, endwall loss, effects of heat transfer, and miscellaneous losses. The loss arising from boundary layer separation is particularly difficult to quantify. Most of the discussion is based on axial flow machines, but a separate section is devoted to the special problems of radial flow machines. In some cases, e.g., attached blade boundary layers, the loss mechanisms are well understood, but even so the loss can seldom be predicted with great accuracy. In many other cases, e.g., endwall loss, the loss mechanisms are still not clearly understood and prediction methods remain very dependent on correlations. The paper emphasizes that the use of correlations should not be a substitute for trying to understand the origins of loss, and suggests that a good physical understanding of the latter may be more valuable than a quantitative prediction.