In an online UPS, the batteries are always connected to the inverter, so that no power transfer switches are necessary. It is called a double-conversion UPS due to the rectifier directly driving the inverter, even when powered from normal AC current. When power loss occurs, the rectifier simply drops out of the circuit and the batteries keep the power steady and unchanged. When power is restored, the rectifier resumes carrying most of the load and begins charging the batteries, though the charging current may be limited to prevent the high-power rectifier from overheating the batteries and boiling off the electrolyte. The main advantage of an on-line UPS is its ability to provide an "electrical firewall" between the incoming utility power and sensitive electronic equipment.

The online UPS is ideal for environments where electrical isolation is necessary or for equipment that is very sensitive to power fluctuations.

The online UPS may be necessary when the power environment is "noisy", when utility power sags, outages and other anomalies are frequent, when protection of sensitive IT equipment loads is required, or when operation from an extended-run backup generator is necessary.