Cartridge forks use a narrow tube, or cartridge, inside the body of the fork which contains the damping mechanism. A rod, attached to the top half of the fork, had a rebound piston on the end moving in damping oil. A compression piston is fixed to the bottom of the lower fork leg. It's a bit like a bicycle pump, only with oil instead of air. Generally speaking, compression pushes oil through the bottom piston where it's slowed by a stack of shims and orifices. This is the damping force which slows the fork's movement. With rebound the oil returns via the rebound piston, with oil flow controlled in a similar way (this is simplified; the oil path is more complex with oil circuits for each stroke, and interaction between the rebound and compression strokes themselves).
Cartridge Forks HistoryCartridge forks evolved in the 1980s because of the need for greater separation of and finer control over the individual damping strokes (as engine, brake and tyre performance all improved, so did the need to handle it). Early forks were rudimentary, with almost no damping control at all – placing the damping action inside a chamber with a piston on a rod let engineers use increasingly complex oil circuitry, shims and orifices to control the oil flow.
There are drawbacks – cartridge are narrow, meaning the damping piston has a small diameter with shims and orifices to match. A larger surface area for the piston would offer the same damping force for a much reduced pressure (or higher damping force for the same pressure), allowing more precise, and controllable damping. Less pressure would also reduce frothing in the damping oil – cavitation – which leads to a fluctuation in damping force.