A subcarrier is a sideband of a radio frequency carrier wave, which is modulated to send additional information. Examples include the provision of colour in a black and white television system or the provision of stereo in a monophonic radio broadcast. There is no physical difference between a carrier and a subcarrier; the "sub" implies that it has been derived from a carrier, which has been amplitude modulated by a steady signal and has a constant frequency relation to it.
Stereo broadcasting is made possible by using a subcarrier on FM radio stations, which takes the left channel and "subtracts" the right channel from it — essentially by hooking up the right-channel wires backward (reversing polarity) and then joining left and reversed-right. The result is modulated with suppressed carrier AM, more correctly called sum and difference modulation or SDM, at 38 kHz in the FM signal, which is joined at 2% modulation with the mono left+right audio (which ranges 50 Hz ~ 15 kHz). A 19 kHz pilot tone is also added at a 9% modulation to trigger radios to decode the stereo subcarrier, making FM stereo fully compatible with mono.
Once the receiver demodulates the L+R and L−R signals, it adds the two signals ([L+R] + [L−R] = 2L) to get the left channel and subtracts ([L+R] − [L−R] = 2R) to get the right channel. Rather than having a local oscillator, the 19 kHz pilot tone provides an in-phase reference signal used to reconstruct the missing carrier wave from the 38 kHz signal.
For AM broadcasting, different analog (AM stereo) and digital (HD Radio) methods are used to produce stereophonic audio. Modulated subcarriers of the type used in FM broadcasting are impractical for AM broadcast due to the relatively narrow signal bandwidth allocated for a given AM signal. On standard AM broadcast radios, the entire 9 kHz to 10 kHz allocated bandwidth of the AM signal may be used for audio.