The wheel's 32 sealed and air-conditioned ovoidal passenger capsules, designed and supplied by Poma, are attached to the external circumference of the wheel and rotated by electric motors. The capsules are numbered from 1 to 33, excluding number 13 for superstitious reasons. Each of the 10-tonne (11-short-ton) capsules represents one of the London Boroughs, and holds up to 25 people, who are free to walk around inside the capsule, though seating is provided. The wheel rotates at 26 cm (10 in) per second (about 0.9 km/h or 0.6 mph) so that one revolution takes about 30 minutes, giving a theoretical capacity of 1,600 passengers per hour. It does not usually stop to take on passengers; the rotation rate is slow enough to allow passengers to walk on and off the moving capsules at ground level. It is stopped to allow disabled or elderly passengers time to embark and disembark safely.

In 2009, the first stage of a £12.5 million capsule upgrade began. Each capsule was taken down and floated down the river to Tilbury Docks in Essex.

On 2 June 2013, a passenger capsule was named the Coronation Capsule to mark the 60th anniversary of the coronation of Queen Elizabeth II.

In March 2020, the London Eye celebrated its 20th birthday by turning several of its pods into experiences themed around London. The experiences included a pub in a capsule, a west end theatre pod and a garden party with flower arrangements to represent the eight London Royal parks.

Marks Barfield (the lead architects), The Tussauds Group, and British Airways were the original owners of the London Eye. Tussauds bought out British Airways' stake in 2005 and then Marks Barfield's stake in 2006 to become sole owner.

In May 2007, the Blackstone Group purchased The Tussauds Group which was then the owner of the Eye; Tussauds was merged with Blackstone's Merlin Entertainments and disappeared as an entity. British Airways continued its brand association, but from the beginning of 2008 the name British Airways was dropped from the logo.

On 12 August 2009, the London Eye saw another rebrand, this time being called "The Merlin Entertainments London Eye". A refurbished ticket hall and 4D cinema experience were designed by architect Kay Elliott working with project designer Craig Sciba, and Simex-Iwerks as the 4D theatre hardware specialists. The film was written and directed by Julian Napier and produced by Phil Streather.

In January 2011, a lighting-up ceremony marked the start of a three-year deal between EDF Energy and Merlin Entertainments.

Coca-Cola began to sponsor the London Eye from January 2015. On the day the sponsorship was announced the London Eye was lit in red.

In February 2020, lastminute.com replaced Coca-Cola as the sponsor. Grammy Award-winning singer Meghan Trainor performed at the launch party on a boat overlooking the London Eye.

In March 2020, the wheel was illuminated blue every Thursday at 8pm in support of the National Health Service as part of the ‘Clap for our Carers’ campaign created during the COVID-19 pandemic.

On 20 May 2005, there were reports of a leaked letter showing that the South Bank Centre (SBC)—owners of part of the land on which the struts of the Eye are located—had served a notice to quit on the attraction along with a demand for an increase in rent from £64,000 per year to £2.5 million, which the operators rejected as unaffordable.

On 25 May 2005, London mayor Ken Livingstone vowed that the landmark would remain in London. He also pledged that if the dispute was not resolved he would use his powers to ask the London Development Agency to issue a compulsory purchase order. The land in question is a small part of the Jubilee Gardens, which was given to the SBC for £1 when the Greater London Council was broken up.

The South Bank Centre and the British Airways London Eye agreed on a 25-year lease on 8 February 2006 after a judicial review over the rent dispute. The lease agreement meant that the South Bank Centre, a publicly funded charity, would receive at least £500,000 a year from the attraction, the status of which is secured for the foreseeable future.

Tussauds also announced the acquisition of the entire one-third interests of British Airways and Marks Barfield in the Eye as well as the outstanding debt to BA. These agreements gave Tussauds 100% ownership and resolved the debt from the Eye's construction loan from British Airways, which stood at more than £150 million by mid-2005 and had been charging an interest rate of 25% per annum.