This simply refers to the direction that the outlet is pointing.The vertical points UP.The horisontal is "horizontal" to the floor.In most applications the vertical is best.I wish mine was vertical....This is a VERRRRRRY good pump.You will be very pleased with it's performance.Mine has been running 24/7 for more than two years now.And has even run dry twice.This would surly have fried most competors pumps,but after unplugging it and cooling down,it starts right back up each time...And still runs TOTALLY QUIET.