Convolutional neural networks apply convolutional layers and pooling layers to process input images and extract features, followed by fully connected layers to classify images. Convolutional layers convolve the image with learnable filters to detect patterns like edges or shapes, while pooling layers reduce the spatial size to reduce parameters. The extracted features are then flattened and passed through fully connected layers like a regular neural network to perform classification with a softmax output layer. Dropout regularization is commonly used to prevent overfitting.