The torque converter is located between the engine and transmission on most vehicles with an automatic transmission.
It is responsible for connecting the engine to the transmission.

Here's a video on how it works:

The torque converter sits in the bell housing in front of the transmission:



The transmission's oil pump, which is fixed to the case of the tranny plugs into the stator and keeps it stationary.
Outside of that is the transmission's input shaft, which connects to the turbine inside.



The entire assembly rotates with the engine, and acts like a flywheel because it has some weight to it.
It acts like a fluid coupling.



I burned through 1 cutoff wheel cutting this torque converter open.



But the results were rewarding. The torque converter's "pump" on the left, and turbine (input to tranny) on the right, with the stator in the middle.



Between all components is a bunch of thrust bearings to keep everything rotating smoothly.



This is the stator. It has a one way clutch to prevent reverse rotation.



And finally this is the lockup torque converter:



Enjoy