Steel guitar, strictly speaking, refers to a method of playing using a metal slide (or 'steel') on a guitar played horizontally, with the strings uppermost. This covers lap steel guitar, pedal steel guitar and 'Dobro' style guitars. The technique was invented in and popularized by Hawaii, thus Hawaiian guitar, and is predated by bottleneck guitar.

A 'Steel Guitar' is one designed exclusively to be played using a steel slide. Most commonly, these are the lap steel and pedal steel. The lap steel is a simple instrument, typically having 6 strings and tuned to either standard tuning, or an open chord. The pedal steel can have between 9 and 13 strings, and sometimes two or even three necks, each in a different tuning. Pedals and knee-levers are used to alter the tunings of different strings, which gives the instrument its distinctive voice, most often heard in country music.

Confusingly, metal-bodied guitars (commonly nickel-plated brass), although frequently played using a metal (or glass) slide, are not properly called steel guitars - they are 'resonator' guitars, which, instead of the more common soundhole, utilise a kind of internal metal (usually spun aluminium) loudspeaker, to amplify the sound.

One make of resonator guitar is the Dobro guitar which features a metal cone where the sound hole would normally be. Versions of this type of guitar, by Dobro and other manufacturers such as National, may feature the entire body made out of wood, painted steel, plated steel or plated brass (a 1937 Style 'O' National resonator is shown on the cover of the Dire Straits album Brothers in Arms).

The term 'steel guitar' should also not be confused with steel strung guitar which is a normal acoustic guitar that has steel rather than nylon or cat-gut strings, although the bass strings will be wound with a bronze alloy, giving the distinctive gold colour.