Currently, there are a number of theories as to how exactly acupuncture works.
It was once thought that inserting needles into specific parts of the body affected nerves and could inhibit their signal transmission. This was thought to explain why acupuncture could treat pain so well. But when doctors mapped the acupuncture points over the known nerve network they found that there was some correlation, but not nearly enough to explain most of its effects.
Another theory stated that acupuncture stimulates the release of opioids and endorphins in the central nervous system. Although this could explain certain analgesic effects, it could not explain many others.
The most current theory speculates that the points are actually strategic conductors of electromagnetic signals throughout the body. Stimulating points along these pathways influences neurotransmitter rates and resets the polarity of different parts of the body. This latest theory is by far the most comprehensive and most promising explanation for why acupuncture works in Western medical terminology.