Noise reduction takes advantage of an acoustic phenomenon known as destructive interference. By displacing two identical sound waves, so they are in opposition, they can destroy or “cancel out” each other, causing silence.
As only exterior noise frequencies are neutralized, the music is not affected. Exterior noise affects a microphone, which is located on the outside of the headphones. The mike records a brief bite of the background noise. The sound bit is sent on to a chip, which analyses the sound wave, producing an identical sound wave in the speaker, only reversed, so the two sound waves are in opposition. The opposition makes the two sound waves neutralize each other. If the two waves were not in opposition, the headphones would have doubled the exterior noise.