Applied to the wonderful world of storytelling, tension is all about one simple question: What will happen next? This uncertainty creates strain or anxiety in your readers, and the only way to relieve it is to keep reading and find out what happens next.

Tension and release is actually a cycle that builds up over the course of a story through what's known as pacing. Check out this awesome video explanation.

Tension is not conflict. Even though you will see the terms used interchangeably in some instances, they are not the same thing. They are cause and effect. Conflict is two opposing characters or forces at odds with each other in your story that usually fight in some physical way. Thus conflict provides a foundation for tension, but simply having two opposing forces in your story does't automatically create a sense of uncertainty about what will happen next.

Why Is Tension Important?

As Alfred Hitchcock said, "There is no terror in the bang, only in the anticipation of it." 

Tension is building up to a bang. Conflict may provide that bang, but you can't have conflict in every scene because that would be chaotic, exhausting, and ultimately more desensitizing than satisfying. 

Writing a novel or any long work is 90% building up anticipation and 10% dropping bombs. Therefore, tensions is imperative if you want to keep your audience reading for long. If they aren't constantly asking what will happen next, how can you expect them to invest in your story or care about the bomb drop in the next chapter or an ending hundreds of pages later? You can't. They didn't agree to that.

A story typically builds tension from the very beginning by asking one big question that's vital to the outcome of the story. This is called the dramatic question, and everything else in your story revolves around it.

Examples

Batman Begins

Dramatic Question: Will Bruce Wayne save Gotham? 
Building Tension: Will Bruce overcome his fears? Will he become Batman? Can he redeem himself? Can he protect Rachel? Can he defeat Ra's al Ghul?

The Emperor's New Groove

Dramatic Question: Will Kuzko build Kuzcotopia?
Building Tension: Will Kuzco ever become human again? Will he survive his journey through the jungle? Will he learn to work with Pacha? Will he figure out Yzma is trying to kill him? Will he be able to take her down and reclaim his throne?

Real nail-biters, am I right?

Creating Tension

So how do you create tension in your own stories? Start by identifying the dramatic question and then begin developing a plot that creates a series of sequences or tension and release arcs all leading up to and escalating the the final climax and release. This will answer your dramatic question once and for all.

Useful plot devices for creating tension:

Ticking Clock: Will your character complete his mission before time runs out?
Ironic Tension: Will the character figure out what the audience already knows?
Dramatic Tension: What will happen on the page right now?
Sexual Tension: Will they or won't they?
In Media Res:  How did these characters get here?

Of course, all questions need answers. Answering the most immediate question is a release that concludes a particular arc within your story before you move onto the next. This release is as important as the tension itself because you don't want to leave your readers hanging forever or keep them in the dark so long they just give up and stop reading. The trick is to ask a question, answer it, and then that answer leads to another question and another tension and release arc until your dramatic question is finally answered.

In the end, you want the tension and releases arcs of your story to look something like this: