Luminous efficacy is a measure of how well a light source produces visible light. It is the ratio of luminous flux to power. Depending on context, the power can be either the radiant flux of the source's output, or it can be the total power (electric power, chemical energy, or others) consumed by the source. Which sense of the term is intended must usually be inferred from the context, and is sometimes unclear. The former sense is sometimes called luminous efficacy of radiation, and the latter luminous efficacy of a source.

The luminous efficacy of a source is a measure of the efficiency with which the source provides visible light from electricity. The luminous efficacy of radiation describes how well a given quantity of electromagnetic radiation from a source produces visible light: the ratio of luminous flux to radiant flux. Not all wavelengths of light are equally visible, or equally effective at stimulating human vision, due to the spectral sensitivity of the human eye; radiation in the infrared and ultravioletparts of the spectrum is useless for illumination. The overall luminous efficacy of a source is the product of how well it converts energy to electromagnetic radiation, and how well the emitted radiation is detected by the human eye.

The candela per square metre (cd/m2) is the derived SI unit of luminance.

The unit is based on the candela, the SI unit of luminous intensity, and the square metre, the SI unit of area.

As a measure of light emitted per unit area, this unit is frequently used to specify the brightness of a display device. Most consumer desktop liquid crystal displays have luminances of 200 to 300 cd/m2; the sRGB spec for monitors targets 80 cd/m2. High-definition televisions range from 450 to about 1000 cd/m2. Typically, calibrated monitors should have a brightness of 120 cd/m2.

Nit (nt) is a non-SI name also used for this unit (1 nit = 1 cd/m2). The term nit is believed to come from the Latin word nitere, to shine.