A smart 4-20mA transmitter included a field-mounted device that sensed a physical parameter and generated a proportional current in the standard range of 4-20mA. Responding to industry demand, the second generation 4-20mA transmitters, called 'smart transmitters', use a microcontroller (μC) and data converter to condition the signal remotely. Smart transmitters can normalize gain and offset, linearize the sensor by converting its analog signal to digital (RTD sensors and thermocouples, for example), process the signals with arithmetic algorithms resident in the μC, convert back to analog, and transmit the result as a standard current along the loop. This is the figure of the diagram smart transmitter;
The newest third-generation 4-20mA transmitters are considered 'smart and intelligent'. They add digital communications which share the twisted-pair line with the 4-20mA signal. The resulting communication channel can transmit control and diagnostic signals along with the sensor data.