Node is completely event-driven. Basically the server consists of one thread processing one event after another.
A new request coming in is one kind of event. The server starts processing it and when there is a blocking IO operation, it does not wait until it completes and instead registers a callback function. The server then immediately starts to process another event (maybe another request). When the IO operation is finished, that is another kind of event, and the server will process it (i.e. continue working on the request) by executing the callback as soon as it has time.
So the server never needs to create additional threads or switch between threads, which means it has very little overhead. If you want to make full use of multiple hardware cores, you just start multiple instances of node.js
Update
At the lowest level (C++ code, not Javascript), there actually are multiple threads in node.js: there is a pool of IO workers whose job it is to receive the IO interrupts and put the corresponding events into the queue to be processed by the main thread. This prevents the main thread from being interrupted.
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