A pressure reducing valve is used to provide a sub-circuit with a supply of fluid at a pressure which is less than the pressure in the main circuit. Figure 1 shows a schematic diagram.

The downstream pressure P acts on the first-stage, spring loaded, poppet valve and when this valve is open, the resultant flow through the orifice drilled through the spool valve creates a pressure differential between the two ends of the spool. This moves the spool against a spring so that the spool throttles the flow between the supply and service ports. If the downstream pressure rises above the required level, the spool moves to increase the throttling action (and vice versa).

Figure 1. Poppet Type Valve