The radiator cap is more than a cap for your radiator; it keeps your engine cool by sealing and pressurizing the coolant inside it. It is designed to hold the coolant in the radiator under a predetermined amount of pressure. If it was not kept under pressure, it would begin to boil, and soon all the coolant would have boiled away. However, the radiator (or pressure) cap prevents this from happening by exerting enough pressure to keep the coolant from boiling. If your cooling system is under too much pressure, it can "blow its top"! To prevent this, the radiator cap has a pressure relief valve. The valve has a preset rating that allows it to take just up to a certain amount of pressure. When you turn the cap on the filler neck of the radiator, you seal the upper and lower sealing surfaces of the filler neck.
The radiator cap actually increases the boiling point of your coolant by about 25 C. How does this simple cap do this? The same way a pressure cooker increases the boiling temperature of water. The cap is actually a pressure release valve, and on cars it is usually set to 15 psi. The boiling point of water increases when the water is placed under pressure.
The pressure relief valve spring is compressed against the lower seal when you lock the cap. The radiator filler neck has an overflow tube right between the two sealing surfaces. If the pressure in the cooling system exceeds the preset rating of your cap, its pressure relief valve allows the lower seal to be lifted from its seat. Then the excess pressure (coolant, air) can squish through the overflow tube to the ground or the coolant reservoir.
When the fluid in the cooling system heats up, it expands, causing the pressure to build up. The cap is the only place where this pressure can escape, so the setting of the spring on the cap determines the maximum pressure in the cooling system. When the pressure reaches 15 psi, the pressure pushes the valve open, allowing coolant to escape from the cooling system. This coolant flows through the overflow tube into the bottom of the overflow tank. This arrangement keeps air out of the system. When the radiator cools back down, a vacuum is created in the cooling system that pulls open another spring loaded valve, sucking water back in from the bottom of the overflow tank to replace the water that was expelled.