The basic physical and chemical principles behind the dye-sensitized nanocrystalline solar cell (DSC: also known as the Grätzel cell after its inventor) are outlined in order to clarify the differences and similarities between the DSC and conventional semiconductor solar cells. The roles of the components of the DSC (wide bandgap oxide, sensitizer dye, redox electrolyte or hole conductor, counter electrode) are examined in order to show how they influence the performance of the system. The routes that can lead to loss of DSC performance are analyzed within a quantitative framework that considers electron transport and interfacial electron transfer processes, and strategies to improve cell performance are discussed. Electron transport and trapping in the mesoporous oxide are discussed, and a novel method to probe the electrochemical potential (quasi Fermi level) of electrons in the DSC is described. The article concludes with an assessment of the prospects for future development of the DSC concept.