I had the same question when researching this model and couldn't figure out how TWO tanks, clean and dirty, could also have shampoo and just rinse water. The two previous answers didn't help me any, maybe because they are already aware of how it works, and don't understand what we don't understand! The Owner's Manual online answered the question for me-- THE CLEAN TANK IS DUAL CHAMBERED, one chamber for shampoo, the other for the water, and the machine releases shampoo into the water coming out if the selector dial is set to wash, and doesn't if it is set to rinse! Why this is not clearer in any of the machine descriptions, or why they just don't say there are three different tanks is beyond me! Hope this helps!