Nuclear power plants are fueled by processed uranium, through a series of steps called the nuclear fuel cycle. Unlike their fossil-fueled cousins, nuclear power plants are not continuously fueled during operation, but rather are shut down at specified intervals and refueled in batches, with only part of the nuclear plant's fuel replaced at shutdown. The discharged or "spent" fuel contains uranium and plutonium, which can be recovered and recycled in subsequent refuelings or in other nuclear plants.

The world market for nuclear fuel and its processing services has always had its special set of circumstances, primarily due to the strategic (nuclear weapons) aspects of uranium. As such, the early years of the industry were dominated by purchases by the US government. In fact, in the U.S.A. only the federal government was allowed to own uranium, creating a monopsony ("only one buyer") situation. A few other governments were also buyers of lesser quantities in the world outside communist areas, while the Soviet government was the only buyer in the communist areas.

A large worldwide production industry emerged in response to these military needs, but as military needs subsided in the 1960s, commercial needs for nuclear power plants were still low, as the use of nuclear power was still in its infancy. As nuclear power use grew, the U.S. Congress passed legislation in 1964, to permit the private ownership of nuclear fuel in the U.S.A., starting in 1968. The U.S. Government was still to be involved, however, as the U.S. Atomic Energy Commission was the non-Communist world’s monopoly supplier of uranium enrichment services.

This private ownership required the development of market mechanisms, which have remained in place with little structural change since the 1970s. For the most part, utilities buy uranium and processing services separately directly from uranium producing and processing companies on a one-to-one basis under long-term (multiple-year) contracts. There is also an active "spot" market, traditionally used for the minority of the industry's business.

Because of historical over-production, technologies for recycling of nuclear fuel products, and the more recent programs in Russia and the U.S.A. to dispose of excess military stocks (including those from the dismantlement of nuclear warheads under the "Russian HEU Deal"), these "secondary sources" have become a major portion of the market's supply and are expected to continue to be for some time.

Government intervention has been another hallmark of nuclear fuel markets, from the government monopsony period of nuclear weapons development, through government ownership of uranium facilities and processing companies, to trade restrictions on imports or exports of uranium from targeted regions.

Most uranium is delivered under long-term contracts, with pricing terms that are specified at the date of contract finalization (usually a base price at a specific date, escalated by any of various public economic indexes to the date of delivery) or are agreed to be tied to the prevailing spot price as of the delivery date.