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Celeron processors can run all IA-32 computer programs, but their performance is often significantly lower when compared to similar CPUs with higher-priced Intel CPU brands. For example, the Celeron brand will often have less cache memory, or have advanced features purposely disabled. These missing features can have a variable impact on performance, but is often very substantial. While a few of the Celeron designs have achieved surprising performance, most of the Celeron line has exhibited noticeably degraded performance. This has been the primary justification for the higher cost of other Intel CPU brands versus the Celeron range.

Introduced in April 1998, the first Celeron branded CPU was based on the Pentium II branded core. Subsequent Celeron branded CPUs were based on the Pentium III, Pentium 4, Pentium M, and Intel Core branded processors. The latest Celeron design (as of July 2011[update]) is based on the second generation Core i3/i5/i7 series (Sandy Bridge). This design features independent processing cores (CPUs), but with only 66% as much cache memory as the comparable Core i3 offering.

The first Covington Celeron was essentially a 266 MHz Pentium II manufactured without any secondary cache at all. Covington also shared the 80523 product code of Deschutes. Although clocked at 266 or 300 MHz (frequencies 33 or 66 MHz higher than the desktop version of the Pentium w/MMX), the cacheless Celerons were a good deal slower than the parts they were designed to replace. Substantial numbers were sold on first release, largely on the strength of the Intel name, but the Celeron quickly achieved a poor reputation both in the trade press and among computer professionals. The initial market interest faded rapidly in the face of its poor performance and with sales at a very low level, Intel felt obliged to develop a substantially faster replacement as soon as possible. Nevertheless the first Celerons were quite popular among some overclockers, for their flexible overclockability and reasonable price. Covington was only manufactured in Slot 1 SEPP format.

At the time on-die cache was difficult to manufacture; especially L2 as more of it is needed to attain an adequate level of performance. A benefit of on-die cache is that it operates at the same clock rate as the CPU. All other Intel CPUs at that time used motherboard mounted or slot mounted secondary L2 cache, which was very easy to manufacture, cheap, and simple to enlarge to any desired size (typical cache sizes were 512 KB or 1 MB), but they carried the performance penalty of slower cache performance, typically running at FSB frequency of 60 to 100 MHz. The Pentium II's 512 KB of L2 cache was implemented with a pair of relatively high-performance L2 cache chips mounted on a special-purpose board alongside the processor itself, running at half the processor's clock rate and communicating with the CPU through a special back-side bus. This method of cache placement was expensive and imposed practical cache-size limits, but allowed the Pentium II to be clocked higher and avoided front side bus RAM/L2 cache contention typical with motherboard-placed L2 cache configurations.