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For an integer modulus $n\ge 2$ and an integer $a$ with greatest common divisor $\gcd (a,n)=1$, Euler's theorem, also called the Fermat-Euler theorem, statesHere Euler's totient function $\phi (n)$ counts the units in the unit group $U(n)=(\mathbb{Z}/n\mathbb{Z}{)}^{\times }$. These congruence classes have modular multiplicative inverses, equivalently their representatives are coprime to $n$. The guaranteed return to one permits exponent reduction for units.^[ref]

For a prime number $p$, $\phi (p)=p-1$, recovering Fermat's little theorem in the form $a^{p-1}\equiv 1(\mathrm{mod}p)$ when $p\nmid a$. Multiplying by $a$ and separately handling $p\mid a$ gives $a^p\equiv a(\mathrm{mod}p)$ for every integer $a$. For a composite number used as the integer modulus, a nonzero congruence class can be a nonunit.

Modulo twelve, the units have representatives $1,5,7,11$, so Euler's totient function gives $\phi (12)=4$. Multiplication by five producesThus this permutation has two permutation cycles, each of length two. In particular $5^2\equiv 1(\mathrm{mod}12)$, and the guaranteed return $5^4\equiv 1$ follows. The number of units need not be the length of one permutation cycle. Modulo fifteen, multiplication by seven similarly gives the two permutation cycles $(1,7,4,13)$ and $(2,14,8,11)$, covering all eight units. The powers of seven follow the permutation cycle containing one; the other permutation cycle shows that these powers do not visit every unit.

There is a stronger obstruction for a nonunit than just an occasional failed calculation. If a positive integer $d>1$ divides both $a$ and $n$, then $a^k\equiv 0(\mathrm{mod}d)$ for every $k\ge 1$, so $a^k$ cannot be congruent to one modulo $n$. For example, $\gcd (3,15)=3$ and $3^{\phi (15)}=3^8\equiv 6(\mathrm{mod}15)$, rather than one. Such a base has no multiplicative order modulo that integer modulus.^[ref]

For a unit modulo n $a$ and a nonnegative integer $k$, division with remainder writes $k=q\phi (n)+r$ with $0\le r<\phi (n)$. Euler's theorem then givesThis replaces a potentially enormous exponent by a small remainder. The exponent itself is reduced modulo Euler's totient function, while the powers are reduced modulo $n$: these are different integer moduli.

For a worked modulo-fifteen calculation, seven is coprime to fifteen and $\phi (15)=8$. ThereforeUse exponentiation by squaring on the remaining exponent $5=(101{)}_2$, reducing after each multiplication:Thus $7^{2029}\mathrm{mod}15=7$. Modular exponentiation supplies the computation; Euler's theorem supplies the optional shortening of its exponent. Exponentiation by squaring also works for nonunit bases, without using this shortening.

The guaranteed exponent $\phi (n)$ is a common return exponent and an upper bound on the shortest period; it need not be that period. The multiplicative order $d={\mathrm{ord}}_n(a)$ is the least positive return exponent for the chosen unit. The Carmichael function $\lambda (n)$ is the least positive return exponent that works for every unit. Their precise relation isEither smaller return exponent can replace $\phi (n)$ in exponent reduction for units. Modulo fifteen, ${\mathrm{ord}}_{15}(7)=\lambda (15)=4<8=\phi (15)$, so $2029=507\cdot 4+1$ gives $7^{2029}\equiv 7$ immediately. For base four the multiplicative order is only two, smaller even than $\lambda (15)$. A return at exponent eight alone does not prove that the multiplicative order is eight.^[ref]

If the reduced exponent is zero, the rule gives $a^k\equiv a^0=1$, and still requires a unit. Applying it to the nonunit three would falsely predict $3^8\equiv 3^0=1(\mathrm{mod}15)$; the actual residue is six. For negative exponents, first interpret the power using a modular multiplicative inverse, as in modular exponentiation.