A ribbon microphone is a type of dynamic microphone that uses a thin aluminum, duraluminum or nanofilm ribbon placed between the poles of a magnet to generate voltages by electromagnetic induction. Ribbon microphones are typically bidirectional, meaning they pick up sounds equally well from either side of the microphone.
In the dynamic microphone, the diaphragm is attached to a light movable coil that generates a voltage as it moves back and forth between the poles of a permanent magnet. In ribbon microphones, a current is induced at right angles to both the ribbon velocity and magnetic field direction. As the sound wave causes the ribbon to move, the induced current in the ribbon is proportional to the particle velocity in the sound wave. The voltage output of older ribbon microphones is typically quite low compared to a dynamic moving coil microphone and a step-up transformer is used to increase the voltage output and increase the output impedance. Modern ribbon microphones do not suffer from this problem due to improved magnets and more efficient transformers, and have output levels that can exceed typical stage dynamic microphones.
Ribbon microphones were once delicate, and expensive, but modern materials make certain present-day ribbon microphones very durable and may be used for loud rock music and stage use. They are prized for their ability to capture high-frequency detail, comparing very favorably with condenser microphones, which can often sound subjectively "aggressive" or "brittle" in the high end of the frequency spectrum. Due to their bidirectional pickup pattern, ribbon microphones are often used in pairs to produce the Blumlein Pair recording array. In addition to the standard bidirectional pickup pattern, ribbon microphones can also be configured to have cardioid, hypercardioid, omnidirectional, and variable polar patterns.
As many mixers are equipped with phantom power in order to enable the use of condenser microphones, care should be taken when using condenser and ribbon microphones at the same time. If the ribbon microphone is improperly wired, which is not unheard of with older microphones, this capacity can damage some ribbon elements, but improvements in designs and materials have made those concerns largely a thing of the past.
In the early 1920s, Drs. Walter H. Schottky and Erwin Gerlach co-invented the first ribbon microphone . By turning the ribbon circuit in the opposite direction, they also invented the first ribbon loudspeaker.
In the late 1920s, Dr. Harry F. Olson of RCA began development of ribbon microphones, ﬁrst with ﬁeld coils and then with permanent magnets. One of the first ribbon microphones was the RCA PB-31. Produced in 1931, it was a breakthrough technology in sound, and revolutionized the audio recording and broadcasting industries, setting a new standard in frequency response. The clarity and realism were unmatched by any of the condenser microphones of its day. 
Just a few months later, in 1932, the PB-31 was replaced by the 44A, which was enormously successful and highly regarded for its smooth tone and defined pattern control, which not only reduced the effects of reverberation on soundstages, but also offered higher gain-before-feedback in live sound applications. The 44A was updated with improved magnetic material in the 44B/44BX models. RCA also launched the unidirectional 77A/77B models and the multipattern 77C/77D mics. Nearly three-quarters of a century later, many of these RCA ribbon models are still hard-working audio tools prized by engineers worldwide.
Also of note is the ST&C Coles 4038 (or PGS - pressure gradient single) designed by the BBC in 1954 and still used for some applications to this day. Its uses varied from talks to symphony concerts and is regarded as a delicate, fine traditional microphone.
Around 2002, relatively inexpensive ($80 - $200) Chinese-manufactured ribbon microphones inspired by the RCA-44 and older Russian Oktava ribbon microphones became available. Chinese-manufactured mics are often used as a platform for microphone modification upgrades that rival classic ribbon mics. 
In 2007, microphones employing ribbon elements made of strong nanomaterials became available, offering orders of magnitude improvement in signal purity and output level.
The ribbon microphone is an electrically simple design with no active circuitry; it is possible to build one in about twenty hours using basic tools and materials. The acoustic complexity of ribbon microphones is comparable to other types of air coupled transducers.