URC’s two-way MX-6000 remote control
You’ve probably stumbled across the term “two-way communications” when researching universal remote controls, home automation systems, even light dimmers.
What does that mean, and how does it compare to “one-way?”
In home-control speak, two-way refers to feedback.
A two-way remote control, for example, may not only operate the thermostats remotely it would also be able to display (in real time) the thermostat’s settings.
A one-way remote, on the other hand, could control the thermostats, but if you adjust the thermostat from the unit itself, it won’t be reflected on the remote’s display.
Two-way communications becomes especially important in a whole-house control system. You might want to know what the lights are doing in every room of the house. You might want to know what tunes are playing in each zone.
With one-way, you could do ALL OFF or ALL ON or dim the rooms to preset levels. But did the lights really respond to the commands? You may never know.
The biggie with two-way is metadata, most commonly associated with music playlists, artists, cover art, etc.
With one-way solutions, you may very well be able to view and browse through these attributes, but you won’t get the real-time “what’s playing” info delivered to your touchscreen, keypad or handheld remote.”
What it Takes to be Two-Way
For two-way communications to happen, obviously the controlling device (say, a keypad) must have the functionality.
But the device being controlled (say, a dimmer), also must have two-way capabilities.
If you press the OUTDOOR LIGHTS scene on your keypad, and you want to know for sure that the lights were turned on, those lights need to be able to send that information back to the keypad.
One-way isn’t bad, of course. Solutions are often less expensive, and they do just fine with virtually any control or entertainment function.
For richer applications and feedback, though, ask about two-way communications.

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May I add that confusion comes in when the terms two-way and bi-directional are used in reference to Home Automation technology. Ms. Jacobson is right when she says two-way is about feedback.
Many home automation technologies are also bi-directional, meaning information (control data) can travel in and out of a device (like a dimmmer) performing a receiver/transceiver role. This is expecially true of most wireless systems such as Z-Wave.
Just remember that bi-directional and two-way are not interchangeable terms.