The term American cheese typically is not used to denote cheese made in the United States or on the American continent, but to describe a product otherwise known as processed cheese or sometimes cheese food. Ordinarily, cheeses separate into their constituent proteins and fats during prolonged heating. American cheese is made from cheese, but typically emulsifiers, smelting salts , and food colourings are added to make the food perform consistently when cooked.

Phosphates and citrates bind to the casein proteins of cheese. With their polarity changed, these proteins now can interact with both water and fat. Smooth creamy cheese, within a large temperature range, is the result. As a consequence, flavor and texture is significantly changed. Nearly odorless, it is one of the blandest varieties of cheese.

Because American cheese does not separate when melted, it is used as an ingredient in a variety of dishes. It is a fairly popular condiment on hamburgers, as it does not run off, nor change in texture or taste, as it is heated.

American cheese is sometimes sold in blocks, but more often sold packed in individual slices, with plastic wrappers or wax paper separating them.

Due to the processing and additives, some varieties cannot legally be labeled as "cheese" in the United States and are sold as "cheese food", "cheese spread", or "cheese product", depending primarily on the amount of cheese, moisture, and milkfat present in the final product.

A genuine American cheese was Liederkranz, made from 1891 to 1981, but now extinct.