We review recent progress in understanding the physical and physiological mechanisms that generate otoacoustic emissions (OAEs). Until recently, the conceptual model underlying the interpretation of OAEs has been an integrated view that regards all OAEs as manifestations of cochlear nonlinearity. However, OAEs appear to arise by at least two fundamentally different mechanisms within the cochlea: nonlinear distortion and linear reflection. These differences in mechanism have be used to construct a new taxonomy for OAEs that identifies OAEs based on their mechanisms of generation rather than the details of their measurement. The mechanism-based taxonomy provides a useful conceptual framework for understanding and interpreting otoacoustic responses. As commonly measured in the clinic, distortion-product and other evoked OAEs comprise a mixtures of emissions produced by both mechanisms. This mixing precludes any fixed correspondence with the conventional, measurement-based nomenclature. We discuss consequences of the taxonomy for the clinical measurement and interpretation of OAEs.