There are two types of pipettes: Positive displacement and air pipettes. Positive displacement pipettes are commonly used for samples of high viscosity (e.g. glycerol) or high vapor pressure (e.g. volatiles like alcohol), while air-displacement pipettes can be used for a majority of laboratory applications.
Modern pipettes, also known as micropipettes, work with a piston-stroke principle – liquid is measured using the piston-cylinder system in the handle of the pipette. When the piston is depressed and then slowly released, the movement of the piston creates a vacuum in the pipette tip and thus draws liquid up inside the tip; which is called aspiration.
Since the piston in a pipette is a long way from the liquid sample, the air cushion between the piston and liquid can have a number of effects on the accuracy of this process, depending on the liquid type. Pressing down on the plunger that has a tip full of liquid expels the liquid out from the tip; this is called dispensing.
Positive displacement pipettes work on a similar principle, however the tip of the positive displacement system contains its own piston and hence there is a minimal air cushion between the piston (that is part of the tip) and the liquid surface.