The original, Pre-Crisis lasso was formed from Aphrodite's girdle and forced whomever was bound within it to obey the commands of whomever held the other end. This effect could be used on larger groups of people, although this reduced its efficiency. In addition to being unbreakable, the lasso was also infinitely elastic. Eventually, Diana coated it in special Amazon chemicals that allowed it to transform her civilian clothes into Wonder Woman's garb. Diana demonstrated a remarkable level of skill with the lasso, performing such feats as twirling it to create air currents (upon which she could float) and spinning it to emit certain frequencies that disrupted Felix Faust's spells.
Post-Crisis, the Lasso of Truth is the primary weapon employed by Wonder Woman. The Lasso was forged by the god, Hephaestus from the Golden Girdle of Gaea that was once worn by Antiope, sister of the future Queen Hippolyta. The lasso is completely unbreakable, immutable, and indestructible. The Lasso also appears to be able to alter in length, based on it's wielder's needs. It is able to restore people's lost memories, hypnotize people, get rid of illusions, and people who are in its circumference will be protected from magical attacks. Empowered by the Fires of Hestia, the Lasso forces anyone held by it to tell and understand the absolute truth. Recently, the Lasso has been shown to actually transport Diana's mind into that of whomever is tied within it. Its effects can be very dangerous, as not everyone is capable of facing the truth of their actions stripped bare of excuses. The Amazon Artemis, inexperienced with the use of the lasso, inadvertently drove a man to suicide after tying him in it, and the Lasso reduced both Captain Nazi and Ares, God of War, to tearful surrender by revealing to them the truth of their violent actions.
With Wonder Woman's strength and speed, the lasso can be used as an offensive and defensive weapon.
When the villain Genocide gained control of it and had the lasso implanted into her body, she used the lasso's powers to directly attack her victim's souls, and was able to bring even powerful and strong willed opponents like Green Lantern John Stewart low with ease using it, demonstrating it's frightening potential as a weapon in the wrong hands.
Donna Troy's Lasso
Wonder Woman's "sister" named Donna Troy uses a similar lasso to that of Wonder Woman. While Donna's lasso is silver, it has the ability to impose her will onto those bound by it, thus forcing them to do as she commands, including speaking the absolute truth. The silver lasso can be overpowered only by those whose will is stronger than Donna's. Like Diana's lasso, it is virtually unbreakable.
Created by Ares, God of War, the golden lasso of lightning is similarly indestructible, but possesses different properties from that of Diana or Donna's lassos. Upon the command of its wielder, Cassandra Sandsmark, the lasso can generate an electrical field of energy stemming directly from the lighting of Zeus. which can be used to injure opponents. This lasso however, cannot force its targets to tell the truth. The force of power is based directly on Cassandra's level of rage.