Insulation works by slowing the movement of heat from a hot space to one that is cooler. Heat moves in three ways: radiation, conduction and convection.
Radiation is heat transfer through electromagnetic light waves that we can't see. You feel radiant heat from a burning fire or from sunlight streaming into a window that strikes your body. In the winter, warm objects in your home can radiate heat directly through glass to the outdoors unless you have special Low-E glass that blocks this infrared energy.
Conduction heat transfer happens when heat moves through an object. The heat excites the molecules in a heated object and these molecules excite the ones next to them. The closer packed the molecules are in an object, the more rapid the heat transfer. A great example of conduction is a cool spoon that is placed in a hot bowl of soup. Within a few minutes the end of the spoon not immersed in the soup will be warm or hot to the touch.