The check engine light is part of your vehicle's onboard diagnostics (OBD) system. Computers have control and monitor vehicle performance, regulating such variables as engine speed (RPM), fuel mixture, and ignition timing, and may even tell the automatic transmission when to shift.
When the electronic-control system finds a problem it cannot adjust, the computer turns on a yellow warning indicator and stores a trouble code in it's memory. These diagnostic trouble codes (DTC) help identify the probable source of the problem, such as a malfunctioning sensor or a misfiring engine and can be read with a scan tool or diagnostic computer. Vehicle manufacturers originally used the OBD system to help technicians pinpoint and troubleshoot malfunctions. Exactly what the OBD system looks for depends on the make, model and year of the vehicle.
The original systems varied widely in their capabilities and some did little more than check whether the various electronic sensors were hooked up and working. With the advent of the OBD II systems, required under federal laws regulating automotive emissions, automakers were required to install a more sophisticated system that, for all intents and purposes, acts like a built-in emissions monitoring station. The check engine light is reserved only for problems that may have an effect on the vehicle emissions systems.