Users are able to organize their music into playlists, edit file information, record compact discs, copy files to a digital audio player, purchase music through its built-in music store, download podcasts, back up songs onto a CD or DVD, run a visualizer to display graphical effects in time to the music as well as encode music into a number of different audio formats.

Smart playlists are playlists that can be set to automatically update based on a customized list of selection criteria. Different criteria can be entered to control many aspects of the playlist.

Playlists can be played randomly or sequentially. The "randomness" of the shuffle algorithm can be biased for or against playing multiple tracks from the same album or artists in sequence (a new feature in iTunes 5.0). Party Shuffle can also be biased towards selecting tracks with a higher star rating. With this bias enabled, each star rating increases the preference for that particular song about 4% over that of a one-star-less rated song. Unrated songs are the least likely to be played.

The Party Shuffle playlist is intended as a simple DJing aid. By default, it selects tracks randomly from other playlists or the library; users can override the automatic selections by deleting tracks (iTunes will choose new ones to replace them) or by adding their own via drag-and-drop or contextual menu. This allows a mixture of both preselected and random tracks in the same meta-playlist. The playlist Party Shuffle draws from can be changed on the fly; this will cause all randomly chosen tracks to disappear and be replaced.

iTunes stores metadata about the audio files in two files:

The first is a binary file called iTunes Library (iTunes x Music Library in previous versions) that uses its own music library format. This both caches information such as artist and genre from the audio format's tag capabilities (for example the ID3 tag), and stores iTunes specific information such as playcount and rating.

The second file, called iTunes Music Library.xml, is refreshed whenever information in iTunes is changed. It uses XML format, allowing developers to easily write applications that can access the information (such as Apple's own iDVD, iMovie, and iPhoto or Freshly Squeezed Software's Rock Star.

This system prevents vendor lock-in as any changes to a track's metadata except playcount, last played date, and rating, is stored in the audio file itself; with all information being available via the XML file.

iTunes 1.0 came with support for the Kerbango Internet radio tuner service, giving iTunes users a selection of some of the more popular online radio streams available. When Kerbango went out of business in 2001, Apple created its own Web radio service for use with iTunes 2.0 and later. As of July 2005, the iTunes radio service features around 200 to 300 distinct "radio stations" (with a total of over 400 streams, allowing for multiple bit rates), mostly in MP3 streaming format. Programming covers many genres of music and talk, including streams from online staples such as Radio Paradise, DI.fm and SomaFM as well as terrestrial stations such as KKJZ, WFMU, and WMVY. iTunes also supports the .pls and .m3u stream file formats used by Winamp, enabling iTunes to access almost any stream using that format.

Apple no longer promotes the Internet radio feature, and no mention of it appears on the iTunes website.

iTunes can currently encode to MP3, AIFF, WAV, MPEG-4, Midi, AAC, and Apple Lossless, and can play anything QuickTime can play (even some video formats), including Protected AAC files from the iTunes Music Store and Audible.com audio books. In order to play other formats such as Ogg Vorbis, iTunes requires addition of QuickTime components.

The Windows version of iTunes can automatically convert unprotected WMA files to other audio formats, but it does not support direct playback or encoding of WMA format.

iTunes Library songs can be shared over a local network using Bonjour (formerly Rendezvous) Apple's implementation of the Zeroconf (zero configuration required) open network standard-which allows shared lists of songs within the same subnet to be automatically detected. When a song is shared, iTunes can stream the song but won't save it on the local hard drive, in order to prevent copying. Songs in Protected AAC format can also be accessed but authentication is required. A maximum of five users may connect to a single user every 24 hours.

Originally with iTunes 4.0, users could freely access shared music anywhere over the internet, in addition to one's own subnet, by specifying IP addresses of remote shared song libraries. Apple quickly removed this feature with version 4.0.1, claiming that users were violating the EULA.

Music sharing uses the Digital Audio Access Protocol (DAAP), created by Apple for this purpose. DAAP has been reverse-engineered and is now used to stream playlists from non-Apple software.

On May 9, 2005, video support was introduced to iTunes with the release of iTunes 4.8. Users can drag and drop movie clips from the computer into the iTunes Library for cataloging and organization. They can be viewed in a small frame in the main iTunes display, in a separate window, or full screen. Video support in iTunes is limited: while videos are distinguished from audio in the Library by a small camera icon, they are still grouped with normal music and organized by the same musical categories (such as "album" and "composer"). iTunes is also incompatible with some common video formats, including AVI and WMV.

On October 12, 2005, Apple introduced iTunes 6.0 which added support for purchasing and viewing of video content from the iTunes Music Store. iTMS initially offered a selection of several thousand Music Videos and five TV shows including most notably ABC's Lost and Desperate Housewives 24 hours after airing as well as the collection from past seasons; since that time, the collection has expanded with NBC Universal, USA Network, and Sci-Fi Channel shows, in additon to further Disney-owned networks' shows. iTMS also gives the ability to view Apple's large collection of movie trailers. Format for purchased Videos is 128 kbit/s Protected MPEG-4 video (H264)1.

iTunes visualisers: the default Apple visualiser is in front; and a 3rd party plugin is behind it.iTunes supports visualizer plugins and device plugins. Visualizer plugins allow developers to create music-driven visual displays (iTunes includes a default visualizer, G-Force, licensed from SoundSpectrum). The visualizer plug-in software development kits for Mac and Windows can be downloaded for free from Apple.[9] Device plugins allow support for additional music player devices, but Apple will only license the APIs to bona fide OEMs who sign a non-disclosure agreement.

Version 4.9 of iTunes on June 28, 2005 added built-in support for podcasting. Users can subscribe to podcasts in the iTunes Music Store or by entering the feed URL. Once subscribed, the podcast will be downloaded automatically. Users can choose to update podcasts weekly, daily, hourly, or manually. Apple maintains four "official" podcasts: Podfinder (with Adam Curry), Street Official Real Talk (interviews with hip-hop artists), iTunes New Music Tuesday, and Apple Quarterly Earnings Call. The front page of the directory also displays high-profile podcasts from commercial broadcasters and independent podcasters. For information on the podcasting feature.

Version 6 of iTunes introduced official support for video podcasting, although video and RSS support was already unofficially there in version 4.9. Users can subscribe to RSS feeds through the iTunes Music Store or by entering the feed URL. Video podcasts can contain downloadable video files (MOV, MP4, M4V, MPG), but also streaming sources and even IPTV. Downloadable files can be synchronized to the new iPod, and both downloadable files and streams can be shown in Apple's new Front Row Media Center application.

iTunes can automatically synchronize its music and video library with an iPod or any other supported digital music player every time it is connected. New songs and playlists are automatically copied to the iPod and songs which have been deleted from the library on the computer are also deleted from the iPod. Ratings awarded to songs on the iPod will sync back to the iTunes library and audiobooks will remember the current playback position.

Automatic synchronization can be turned off in favor of manually copying individual songs or complete playlists; however, iTunes supports only copying music to the iPod but not from it, which has inspired third party software for the latter purpose. It is also possible to copy from the iPod using ordinary Unix command line tools.

When an iPod is connected that does not contain enough free space to sync the entire iTunes music library, a playlist will be created and given a name matching that of the connected iPod. This playlist can then be modified to the user's preference in song selection to fill the available space.

iPod owners in US markets are taken to a one-time page within the iTunes Music store when first connecting it to their computer. This page currently offers a free album sampler from Lava and Atlantic Records where either the whole album or individual tracks can be downloaded. An album sampler from Universal Records was previously available and may still be accessed via a special link on the web.

iTunes supports a number of other popular portable music players with some limitations, most notably the inability to play music purchased from the iTunes Music Store. Supported players include a number of NOMAD players from Creative Labs, some players from Rio Audio, and the Nakamichi SoundSpace 2 device. Other manufacturers may also offer integration by way of a device plugin.

Though iTunes is the only official method for synchronizing with the iPod, there are other programs available that allow the iPod to sync with other software players, most notably the ml_iPod plugin for Winamp, that allows users to manage their iPod content through Winamp, and provides functionality not available through iTunes, such as the copying of music off of the iPod.