To understand the Carnot cycle, let us consider the piston and cylinder arrangement as shown in figure 1 and the accompanying P-V diagram in which all the four processes of the Carnot cycle are shown.
1) Reversible isothermal process 1-2: During this process the piston starts moving outside the cylinder. The working fluid air or steam absorbs heat Q1 isothermally from the high temperatures reservoir which is at temperature T1. Since the heat is absorbed by the fluid, its internal energy increases. During this process the cylinder is assumed to be covered with diathermic cover.
2) Reversible adiabatic process 2-3: During this process the piston moves further outwards from position 2 to 3 reversibly and adiabatically. During this process the work is generated by the system at the expense of the internal energy and the temperature of the system reduces from T1 to T2. The system is assumed to be covered with adiabatic cover which prevents the exchange of heat with the surroundings.
3) Reversible isothermal process 3-4: During this process the system of piston and cylinder loses heat Q2 isothermally and reversibly to the surrounding or sink at temperature T2. The internal energy of the system reduces further. The piston starts moving inside the cylinder.
4) Reversible adiabatic process 4-1: During this process external work is done on the system and the fluid within the cylinder is compressed. Due to this the temperature of the fluid increases from T1 to T2. The process is reversible adiabatic hence the heat content of the system remains constant.