We develop and examine the principles governing the formation of distortions in the cosmic microwave background. Perturbations in the frequency or spectral distribution of the background probe the thermal history of the universe, whereas those in the angular temperature distribution probe its dynamics and geometry. Stressing model independent results, we show how the microwave background can be used to extract information on the mass density, vacuum density, baryon content, radiation content, expansion rate and some aspects of structure formation in the universe. To address these issues, we develop elements of relativistic kinetic and perturbation theory as they become necessary for the description of the particle and gravitational interactions of the photons. Subtle issues such as fluctuation representation, or gauge, normal mode analysis in an open geometry, and second order effects are considered in detail. Employing analytic and numerical results, we construct anisotropies in a critical, open, and cosmological constant universe with adiabatic and/or isocurvature initial conditions allowing for possible early reionization. We find that anisotropy formation is a simple process governed by the Compton scattering of photons off electrons and their gravitational coupling to the other particle species in the universe.