Only the top teams from Europe can qualify for the tournament. Each country is allocated a certain number of teams that it may enter to the competition. Generally, teams that win the top league and/or cup tournament win qualification (though the details vary between countries). There are then 4 qualification rounds of the competition, it is an knock-out competition. Depending on how well a team, does in their domestic tournament, some teams may skip some or all of the qualification rounds.
All qualified teams (32 in total) then enter the group stage. In the group stage, there are 8 groups, each with 4 teams. Each team plays every other team in the group twice - once home; once away. The top two teams in each group qualify for the next round.
The further rounds are then in a knock out style. 16 teams enter the second round. Each match is played over two legs, with the winners on aggregate progressing to the next round. If there is a draw, away goals, extra time and penalties can be used (in that order).
The final has only one leg, played at a neutral ground. If there is a draw, extra time, then penalties are used. The winners of the final earn the European Champion's Cup trophy, as well as earning a large sum of money.