A CD format launched around 1997 that enabled recording and re-use of CDs. CD-RW uses a phase change to record data. The recording layer is a special alloy (typically silver/indium/antimony/tellurium). The laser in the CD drive has three power levels. The highest level melts small regions of the recording layer and these cool quickly to an amorphous form, thereby creating small pits in the recording surface. This level is used for writing data to the disk. The intermediate power level heats the surface to a temperature below the melting point, but high enough to cause recrystallization of the amorphous pits. This is used for erasing data. The lowest power level is used for reading data from the disk in the same way that data is read from a CD-ROM.

These disks were originally described as CD-E (CD-erasable). In the earliest type it was possible to add data incrementally to the disk, but to re-use space it was necessary to erase (i.e. reformat) the whole disk. Drag-and-drop could be used only with special packet-writing applications. These problems were solved by the Mount Rainier specification. Designed to enable native operating-system support for CD-RW, it eliminated the need for third-party software and enabled CD-RW to function in (almost) the same way as a magnetic disk.