A furnace and a heat pump are both heating systems, but they operate differently. A furnace generates heat by burning fuel (such as natural gas or oil) or through electric heating elements, producing warm air that's distributed throughout a home via ductwork. It is typically used in colder climates and requires a separate cooling system for air conditioning. On the other hand, a heat pump can provide both heating and cooling by transferring heat between the indoors and outdoors. In heating mode, it extracts heat from the outside air or ground and pumps it inside, while in cooling mode, it reverses the process to remove heat from indoors. Heat pumps are more energy-efficient for heating in moderate climates but may require supplemental heating in extremely cold conditions. The choice between a furnace and a heat pump depends on your climate, energy costs, and specific heating and cooling needs.