As the name implies, it uses tiltable (rotating) propellers, or rotors, for lift and propulsion. For vertical flight the rotors are tilted to blow down, providing lift. In this mode of operation the craft is essentially identical to a helicopter. As the craft gains altitude, the rotors are slowly tilted to point towards the rear, eventually becoming perpendicular to the ground. In this mode the craft is essentially a propeller aircraft.
In vertical flight, yaw is controlled either by differential rotation of the rotors, (using a differential powered by a hydraulic or electric motor), or by thrusting the rotors in opposite directions. Other designs added additional propellers for added yaw authority. Vertical motion is controlled with conventional pitch and collective controls, just like a helicopter.
The advantage is primarily speed. In a helicopter the maximum forward speed is defined by the speed that the rotor turns at, at some point the helicopter will be moving forward at the same speed as the backward-moving side of the rotor is spinning, so that side of the rotor sees zero airspeed, and stalls. In reality the maximum speed is even less than this. However with the tiltrotor this problem is avoided, because the rotors are perpendicular to the motion in the high-speed portions of the flight regime. This means the tiltrotor has no built-in maximum speed, and in fact is simply much faster in practical terms too. That extra speed is delivered using the same power as a helicopter of the same lifting capacity, meaning that the tiltrotor also uses considerably less fuel, or has much better range.
These qualities are of particular interest to the military. A "helicopter" that can conduct missions at longer distances means that there is less need for other aircraft to fill in those range requirements. For instance the ASW mission is currently supported at short ranges by helicopters, and longer ranges by turboprop or jet aircraft, but a tiltrotor could fill both of these missions. The longer range means that tiltrotors can directly increase the security of a carrier operating group or forward air base, by allowing the airbase to be located further from the front lines.
Better yet, since it can complete its mission faster, on the order of twice as fast, it halves the number of aircraft needed to fill a particular airlift capability. The speed aids MEDEVAC, and allows more centralized medical facilities. This results in higher standards of care, not least from reduced physician fatigue.
Several designs of such aircraft have been built, starting with the introduction of large turbine engines in the late 1950s. Two particularly successful designs were the Canadair CL-84 Dynavert and the LTV XC-142. Both aircraft were technical successes, but neither entered production due to other issues.
However Bell Aircraft was the primary keeper of the tiltrotor flame, with major designs from almost every decade back to the 1950s. They are also the only company to have produced a production tiltrotor aircraft, the Boeing-built V-22 Osprey. The Osprey has had a chequered history, but the reasons for this are not entirely clear – earlier projects were just as challenging and worked, and Bell's earlier models leading up to the V-22 were generally very successful. It appears that these problems were largely "bad luck" as opposed to any flaw in the concept, and with the bugs being worked out of the design, Boeing is now moving on to commercial tiltrotor designs, and Bell is studing larger four-rotor military models that would replace the Lockheed C-130 Hercules.
See also: V-22 Osprey, XV-15, XV-3