Router bits come in hundreds of varieties to create either decorative effects or joinery aids. Generally, they are classified as either high-speed steel (HSS) or carbide-tipped, however some recent innovations such as solid carbide bits provide even more variety for specialized tasks.

Aside from the materials they are made of, bits can be classified as edge bits or non-edge bits, and whether the bit is designed to be anti-kickback. Edge bits have a small wheel bearing to act as a fence against the work in making edge mouldings. Non-edge bits require the use of a fence, either on a router table or attached to the work or router. Anti-kickback bits employ added non-cutting bit material around the circumference of the bit's shoulders which serves to limit feed-rate and thereby reduce the chance that the workpiece is pushed too deeply into the bit, causing the cutting edge to be unable to compensate, which results in significant kickback.

Bits also differ by the diameter of their shank, with ½ inch, 12 mm, 10 mm, 3/8 inch, 8 mm and ¼ inch and 6 mm shanks (ordered from thickest to thinnest) being the most common. Half-inch bits cost more but, being stiffer, are less prone to vibration (giving smoother cuts) and are less likely to break than the smaller sizes. The bit shank and router collet sizes must match. Many routers come with removable collets for the popular shank sizes (in the USA 1/2in and 1/4in, in Great Britain 1/2in, 8 mm and 1/4in and metric sizes in Europe - although in the United States the 3/8-inch and 8 mm sizes are often only available for extra cost).

Many modern routers allow the speed of the bit's rotation to be varied. A slower rotation allows bits of larger cutting diameter to be used safely. Typical speeds range from 8,000 to 30,000 rpm.

Router Bits can be made to match any imaginable profile. Companies which manufacture custom router bits may be found on the Internet. This is especially beneficial for home restoration projects when often the trim and molding of the home is out of production.