1. AdSense Is for Website Publishers, AdWords Is for Businesses
The fundamental difference between AdWords and AdSense is who they’re designed for. AdWords is for advertisers and AdSense is for publishers, or website owners.

AdWords enables businesses and marketers to advertise on Google’s network (search, display, etc).

AdSense enables publishers to reserve space for AdWords placements on their website (text, video, images).

Both AdWords and AdSense work together to complete Google’s greater advertising network: website owners put up space for Google’s ads (AdSense) and businesses set budgets and ads to display on Google’s advertising network (AdWords).

2. AdSense Pays Website Owners, Businesses Pay AdWords
The second big difference between the that AdWords is used to buy advertising from Google, where AdSense is to sell advertising space to Google.

With AdWords, businesses are paying Google to place their ads on Google’s search and display network.

With AdSense, website owners are getting paid by Google to offer up precious website real estate for AdWords placements.

Businesses that use AdWords will pay Google a sum based on their campaign budget. AdSense allows publishers to monetize their websites by displaying relevant Google AdWords ads. Publishers get paid when visitors click on the ads.