z/OS supports stable mainframe systems and standards such as CICS, COBOL, IMS, DB2, RACF, SNA, IBM MQ, record-oriented data access methods, REXX, CLIST, SMP/E, JCL, TSO/E, and ISPF, among others. However, z/OS also supports 64-bit Java, C, C++, and UNIX (Single UNIX Specification) APIs and applications through UNIX System Services – The Open Group certifies z/OS as a compliant UNIX operating system – with UNIX/Linux-style hierarchical HFS and zFS file systems. As a result, z/OS hosts a broad range of commercial and open source software. z/OS can communicate directly via TCP/IP, including IPv6, and includes standard HTTP servers (one from Lotus, the other Apache-derived) along with other common services such as FTP, NFS, and CIFS/SMB. Another central design philosophy is support for extremely high quality of service (QoS), even within a single operating system instance, although z/OS has built-in support for Parallel Sysplex clustering.

z/OS has a Workload Manager (WLM) and dispatcher which automatically manages numerous concurrently hosted units of work running in separate key-protected address spaces according to dynamically adjustable goals. This capability inherently supports multi-tenancy within a single operating system image. However, modern IBM mainframes also offer two additional levels of virtualization: LPARs and (optionally) z/VM. These new functions within the hardware, z/OS, and z/VM — and Linux and OpenSolaris support — have encouraged development of new applications for mainframes. Many of them utilize the WebSphere Application Server for z/OS middleware.

From its inception z/OS has supported tri-modal addressing (24-bit, 31-bit, and 64-bit). Up through Version 1.5, z/OS itself could start in either 31-bit ESA/390 or 64-bit z/Architecture mode, so it could function on older hardware albeit without 64-bit application support on those machines. (Only the newer z/Architecture hardware manufactured starting in the year 2000 can run 64-bit code.) IBM support for z/OS 1.5 ended on March 31, 2007. Now z/OS is only supported on z/Architecture mainframes and only runs in 64-bit mode. Application programmers can still use any addressing mode: all applications, regardless of their addressing mode(s), can coexist without modification, and IBM maintains commitment to tri-modal backward compatibility. However, increasing numbers of middleware products and applications, such as DB2 Version 8 and above, now require and exploit 64-bit addressing.

IBM markets z/OS as its flagship operating system, suited for continuous, high-volume operation with high security and stability.

z/OS is available under standard license pricing as well as via IBM Z New Application License Charges (zNALC) and "IBM Z Solution Edition," two lower priced offerings aimed at supporting newer applications ("new workloads"). U.S. standard commercial z/OS pricing starts at about $125 per month, including support, for the smallest zNALC installation running the base z/OS product plus a typical set of optional z/OS features.

z/OS introduced Variable Workload License Charges (VWLC) and Entry Workload License Charges (EWLC) which are sub-capacity billing options. VWLC and EWLC customers only pay for peak monthly z/OS usage, not for full machine capacity as with the previous OS/390 operating system. VWLC and EWLC are also available for most IBM software products running on z/OS, and their peaks are separately calculated but can never exceed the z/OS peak. To be eligible for sub-capacity licensing, a z/OS customer must be running in 64-bit mode (which requires z/Architecture hardware), must have completely eliminated OS/390 from the system, and must e-mail IBM monthly sub-capacity reports. Sub-capacity billing substantially reduces software charges for most IBM mainframe customers.[7] Advanced Workload License Charges (AWLC) is the successor to VWLC on mainframe models starting with the zEnterprise 196, and EAWLC is an option on zEnterprise 114 models. AWLC and EAWLC offer further sub-capacity discounts.