Pressurized gas is injected tangentially into a swirl chamber and accelerated to a high rate of rotation. Due to the conical nozzle at the end of the tube, only the outer shell of the compressed gas is allowed to escape at that end. The remainder of the gas is forced to return in an inner vortex of reduced diameter within the outer vortex.
There are different explanations for the effect and there is debate on which explanation is best or correct.
What is usually agreed upon is that the air in the tube experiences mostly "solid body rotation", which means the rotation rate (angular velocity) of the inner gas is the same as that of the outer gas. This is different from what most consider standard vortex behavior — where inner fluid spins at a higher rate than outer fluid. The (mostly) solid body rotation is probably due to the long length of time during which each parcel of air remains in the vortex — allowing friction between the inner parcels and outer parcels to have a notable effect.
It is also usually agreed upon that there is a slight effect of hot air tending to "rise" toward the center, but this effect is negligible — especially if turbulence is kept to a minimum.
One simple explanation is that the outer air is under higher pressure than the inner air (because of centrifugal force). Therefore the temperature of the outer air is higher than that of the inner air.
Another explanation is that as both vortices rotate at the same angular velocity and direction, the inner vortex has lost angular momentum. The decrease of angular momentum is transferred as kinetic energy to the outer vortex, resulting in separated flows of hot and cold gas.
When used to refrigerate, heat-sinking the whole vortex tube is helpful.
The vortex tube was invented in 1933 by French physicist Georges J. Ranque. German physicist Rudolf Hilsch improved the design and published a widely-read paper in 1947 on the device, which he called a Wirbelrohr (literally, whirl pipe). The vortex tube was used to separate gas mixtures, oxygen and nitrogen, carbon dioxide and helium, carbon dioxide and air in 1967 by Linderstrom-Lang.  Vortex tubes also seem to work with liquids to some extent. In 1988 R.T.Balmer applied liquid water as the working medium. It was found that when the inlet pressure is high, for instance 20-50 bar, the heat energy separation process exists in incompressible (liquids) vortex flow as well.
Vortex tubes have lower efficiency than traditional air conditioning equipment. They are commonly used for inexpensive spot cooling, when compressed air is available.
Current applications 
Commercial vortex tubes are designed for industrial applications to produce a temperature drop of about 26.6 °C (48 °F). With no moving parts, no electricity, and no Freon, a vortex tube can produce refrigeration up to 6,000 BTU (6,300 kJ) using only filtered compressed air at 100 PSI (689 kPa). A control valve in the hot air exhaust adjusts temperatures, flows and refrigeration over a wide range.
Vortex tubes are used for cooling of cutting tools (lathes and mills, both manually-operated and CNC machines) during machining. The vortex tube is well-matched to this application: machine shops generally already use compressed air, and a fast jet of cold air provides both cooling and removal of the "chips" produced by the tool. This completely elimininates or drastically reduces the need for liquid coolant, which is messy, expensive, and environmentally hazardous.
Proposed applications 
- Dave Williams, of dissigno, has proposed using vortex tubes to make ice in third-world countries. Although the technique is inefficient, Williams expressed hope that vortex tubes could yield helpful results in areas where using electricity to make ice is not an option. Other forms of energy would in any case be required for the compression of the air feeding the vortex (e.g. fuel or coal combustion).
See also 
- exair.com - Vortex tube theory
- *Rudolf Hilsch, The Use of the Expansion of Gases in A Centrifugal Field as Cooling Process, The Review of Scientific Instruments, vol. 18(2), 108-1113, (1947). translation of an article in Zeit. Naturwis. 1 (1946) 208.
- Chengming Gao, Experimental Study on the Ranque-Hilsch Vortex Tube, (2005) page 2
- Vortex tubes are constructed of stainless steel and use a generator and valve made of brass and sealed with viton o-rings to allow their use in the widest range of environments.
- R.T. Balmer. Pressure-driven Ranque-Hilsch temperature separation in liquids. Trans. ASME, J. Fluids Engineering, 110:161–164, June 1988.
- Newman Tools Inc. http://www.newmantools.com/vortex.htm
Further reading 
- G. Ranque, Expériences sur la Détente Giratoire avec Productions Simultanées d'un Echappement d'air Chaud et d'un Echappement d'air Froid, J. de Physique et Radium 4(7)(1933) 112S.
- H. C. Van Ness, Understanding Thermodynamics, New York: Dover, 1969, starting on page 53. A discussion of the vortex tube in terms of conventional thermodynamics.
- Mark P. Silverman, And Yet it Moves: Strange Systems and Subtle Questions in Physics, Cambridge, 1993, Chapter 6
- Samuel B. Hsueh and Frank R. Swenson,"Vortex Diode Interior Flows," 1970 Missouri Academy of Science Proceedings, Warrensburg, Mo.
- C. L. Stong, The Amateur Scientist, London: Heinemann Educational Books Ltd, 1962, Chapter IX, Section 4, The "Hilsch" Vortex Tube, p514-519.
- J. J. Van Deemter, On the Theory of the Ranque-Hilsch Cooling Effect, Applied Science Research 3, 174-196.
- Saidi, M.H. and Valipour, M.S., "Experimental Modeling of Vortex Tube Refrigerator", J. of Applied Thermal Engineering, Vol.23, pp. 1971-1980, 2003.
- Valipour MS, and Niazi N, "Experimental modeling of a curved Ranque–Hilsch vortex tube refrigerator", International Journal of Refrigeration, vol.34(4),1109-1116, 2011.(http://dx.doi.org/10.1016/j.ijrefrig.2011.02.013)
- M. Kurosaka, Acoustic Streaming in Swirling Flow and the Ranque-Hilsch (vortex-tube) Effect, Journal of Fluid Mechanics, 1982, 124:139-172
- M. Kurosaka, J.Q. Chu, J.R. Goodman, Ranque-Hilsch Effect Revisited: Temperature Separation Traced to Orderly Spinning Waves or 'Vortex Whistle', Paper AIAA-82-0952 presented at the AIAA/ASME 3rd Joint Thermophysics Conference (June 1982)
- Gao, Chengming. Experimental Study on the Ranque-Hilsch Vortex Tube. Eindhoven : Technische Universiteit Eindhoven. ISBN 90-386-2361-5.
- R. Ricci, A. Secchiaroli, V. D’Alessandro, S. Montelpare. Numerical analysis of compressible turbulent helical flow in a Ranque-Hilsch vortex tube. Computational Methods and Experimental Measurement XIV, pp. 353-364, Ed. C. Brebbia, C.M. Carlomagno, ISBN 978-1-84564-187-0.
- A. Secchiaroli, R. Ricci, S. Montelpare, V. D’Alessandro. Fluid Dynamics Analysis of a Ranque-Hilsch Vortex-Tube. Il Nuovo Cimento C, vol.32, 2009, ISSN 1124-1896.
- A. Secchiaroli, R. Ricci, S. Montelpare, V. D’Alessandro. Numerical simulation of turbulent flow in a Ranque-Hilsch vortex-tube. Int. J. of Heat and Mass Transfer, Vol. 52, Issues 23-24, November 2009, pp. 5496-5511, ISSN 0017-9310.