The head gasket is located between the cylinder head and the engine block (short block).
Head gaskets are mainly made of a fiberous material, much like paper. They somtimes include thin layers of metal. The edge around combustion chambers are usually surrounded by metal.
The most common cause of a head gasket leak (also know as a "blown" head gasket) is overheating. Overheating may cause the head gasket to deform or break. Another cause of head gasket failure is deterioration. Over time, metal in head gaskets may corrode or the fiberous head gasket material may deteriorate.
A failed head gasket will have different effects, depending on where the break/breach occurs. The following are types of breaches and effect:
- Combustion Chamber > Coolant Passage: This type of failure causes combustion gases to enter a coolant passage. The gases will displace (push) coolant out of the cooling system. In extreme cases, you will be able to smell exhaust fumes in the radiator or coolant reservoir. In less obvious cases a "block test" is required to detect combustion gases in the cooling system. A block test uses a dye that changes colors when it detects combusiton gases.
More on this subject: It is also possible for coolant to enter the combustion chamber (see below, "Coolant Passage > Combustion Chamber") but this isn't always the case when the defect in the head gasket is very small. Pressure inside a typical cooling system is around 15 psi. Pressure in the combustion chamber can 150 psi to 1,000 psi. A very small defect may be able to withstand 15 psi of coolant pressure from forcing coolant into the combustion chamber, but can't resist the extreme pressures created by combustion. So, it is common to find combustion gases in the cooling system without finding coolant in the combustion chamber.