The cat is located around a third of the way down the exhaust system and looks like a small metal chamber which receives all the gasses coming from the exhaust system and changes their chemical nature in order to reduce the bad emissions’ volume that come out of the exhaust manifold. Inside the cat housing there is a honeycomb structure made of ceramic and also lined with highly precious metals, wherein each metal has a specific role in the reduction of emissions.
Car engines produce three main emissions: carbon dioxide (CO2), nitrogen gas (N2), and water vapor (H2O). The catalytic converter is used mainly to tackle the more-harmful and smaller products which are produced as the result of the naturally-imperfect combustion process of the internal combustion engine. These products are carbon monoxide, nitrogen oxides and hydrocarbons. Because of these three main types of emission, most cats nowadays are known as three-way catalytic converters.
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On the picture below we can see the exhaust system of an old Chevrolet vehicle, which us shows where the catalytic converter is placed.
The catalyst is a substance which accelerates a chemical reaction, and so there are two kinds of catalytic substances within a catalytic converter. The first one is a reduction catalyst using rhodium and platinum within the honeycomb structure with the purpose of reducing NOx emissions. The NOx is the result of nitrogen oxide and nitrogen dioxide within the exhaust gasses. These nitrogen gasses interact with the catalyst metals that remove the nitrogen atoms from the NOx molecules and this in-turn emits cleaner O2 that travels down the exhaust pipes.
The second type of catalyst is an oxidization catalyst that uses palladium and platinum to do the job. This catalyst oxidizes or burns the carbon monoxide and hydrocarbons within the incoming gas, and thus helping to reduce the amount of smog which comes from the unburnt, evaporated fuel.
The honeycomb mesh of the catalytic converter seen on the picture below is what which maximizes the surface area where the exhaust gases interact.

The last stage of emission control occurs thanks to an oxygen sensor placed just upstream from the cat. This sensor sends information back to the ECU just how much O2 has been found within the exhaust gasses, and then the on-board computer is able to adjust the air/fuel ratio and this enables the engine to run as close to the Stoichiometric point as possible.
At this point -- in theory -- all of the fuel that enters the combustion chamber should use all of the oxygen in order to finish the combustion process. So, this final stage helps not only the overall efficiency of the engine, it also enables the engine to provide enough oxygen for the cat to effectively complete the oxidization process together with the second catalyst.
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