The electronic structure and physical mechanisms of carrier generation and transport in the organic bulk heterojunction are reviewed. The electronic structure describes the bands and band-tail states, the band alignment at the bulk-heterojunction interface, and the overall density-of-states model. The different electronic character of excitons and mobile charge is discussed, the former being highly molecular and the latter more delocalized. Dissociation of the exciton via the charge-transfer (CT) states is attributed to weak binding of the CT state arising from charge delocalization. Carrier transport and charge collection is strongly influenced by the presence of localized band-tail states. Recombination is attributed primarily to transitions from mobile carriers to band-tail or deep trap states.