A compass ( 指南针 ) is a navigational instrument for finding directions on the earth. It consists of a magnetised pointer free to align itself accurately with Earth's magnetic field. A compass provides a known reference direction which is of great assistance in navigation. The cardinal points are north, south, east and west. A compass can be used in conjunction with a clock and a sextant to provide a very accurate navigation capability. This device greatly improved maritime trade by making travel safer and more efficient.

A compass can be any magnetic device using a needle to indicate the direction of the magnetic north of a planet's magnetosphere. Any instrument with a magnetized bar or needle turning freely upon a pivot and pointing in a northerly and southerly direction can be considered a compass. A compass dial is a small pocket compass with a sundial. A variation compass is a specific instrument of a delicate type of construction. It is used by observing variations of the needle. A gyrocompass or astrocompass can also be used to ascertain true North.

Compasses were initially used in feng shui ( 风水 ) in ancient China. The first known use of Earth's magnetic field in this way occurred in ancient China as a spectacle. Arrows were cast similarly to dice. These magnetised arrows aligned themselves pointing north, impressing the audience. The earliest record of use of magnetic lodestone as a direction point was in a 4th century Chinese book: "Book of the Devil Valley Master"

"Dream Pool Essays" written by Song Dynasty scholar Shen Kua in 1086 AD contained a detailed description of how geomancer magnetized a needle by rubbing its tip with lodestone, and hanged the magnetic needle with one single strain of silk with a bit of wax attached to the center of the needle. Shen Kuo ( 沈括 ) pointed out that the needle prepared this way some times pointed south, some times pointed north.

The earliest record about the use of compass in navigation was Zhu Yu's book "Pingzhou Ke Tan" (Pingzhou Table Talks) of 1117 AD.

The navigator knows the geography, he watches the stars at night, watches the sun at day; when it is dark and cloudy, he watches the compass

Knowledge of the compass moved overland through the Arab countries and then to Europe sometime later in the 12th century. The compass, for example, is described and reported being used in the book Lubab ul-Albab for purposes of sea navigation around 1220. About 1358, there is a story about an English monk, Nicholas of Lynne, who served as a navigator due to his competence and knowledge in the "magnetic compass".

Prior to the introduction of the compass, wayfinding at sea was primarily done via celestial navigation, supplemented in some places by the use of soundings. Difficulties arose where the sea was too deep for soundings and conditions were continually overcast or foggy. Thus the compass was not of the same utility everywhere. For example, the Arabs could generally rely on clear skies in navigating the Persian Gulf and the Indian Ocean (as well as the predictable nature of the monsoons). This may explain in part their relatively late adoption of the compass. Mariners in the relatively shallow Baltic made extensive use of soundings.

In the Mediterranean, however, the practice from ancient times had been to curtail sea travel between October and April, due in part to the lack of dependable clear skies during the Mediterranean winter (and much of the sea is too deep for soundings). With improvements in dead reckoning methods, and the development of better charts, this changed during the second half of the 13th century. By around 1290 the sailing season could start in late January or February, and end in December. The additional few months were of considerable economic importance; it enabled Venetian convoys, for instance, to make two round trips a year to the eastern Mediterranean, instead of one.

Around the same time traffic between the Mediterranean and northern Europe increased, and one factor may be that the compass made traversal of the Bay of Biscay safer and easier.