Let be a multiplicative subset, containing one and closed under products. On , use
The relation is reflexive and symmetric. For transitivity, if and , then multiplication and addition give . Thus it is an equivalence relation. Write for the equivalence class. The localization of a ring has operations
They are well defined. For example, replacing by in its sum with gives cross-numerator difference , and in its product with gives . The same annihilating element kills both differences. Replacing the other input works identically. Associativity and distributivity then follow by putting all terms over the product of their denominators and using the ring identities in . Addition and multiplication are commutative, with identities and , and the displayed negative is an additive inverse. Hence is a commutative ring. If , the fraction relation identifies all elements, producing the zero ring.
The canonical ring homomorphism , , makes each a unit, with inverse . The universal property of localization states that any ring homomorphism sending into the units factors uniquely through . Define the factor by
If , then is invertible, so , proving well-definedness. The fraction operations prove that is a ring homomorphism. Its value is forced by , so it is unique. This property characterizes the localization up to a unique compatible isomorphism.
For a prime ideal , its complement is a multiplicative subset, and the localization at a prime ideal is . Fractions with numerator outside are units; those with numerator in form the unique maximal ideal . Thus it is a local ring.
For the nilpotent question, suppose and . Its annihilator is a proper ideal, so it lies in some maximal ideal . The fraction criterion says in only if for some , which is impossible by the choice of . Thus is a nonzero nilpotent element in that localization. This proves reducedness is detected by prime localizations: if every prime localization is reduced, has no nonzero nilpotent elements.
For the domain question take with a field. Its only prime ideals are and : a prime ideal must contain one of the orthogonal idempotents , and the corresponding quotient is . Localizing at makes invertible and kills , giving ; similarly . But with both factors nonzero. Therefore domain prime localizations do not force to be an integral domain, as expressed by domain prime localizations do not imply a domain.

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