Basics of current loop App note from Murata, discussing the basic theory of the 4-20mA current loop operation. Link here (PDF)
The 4-20mA current loop is a common method of transmitting sensor information in many industrial process-monitoring applications. A sensor is a device used to measure physical parameters such as temperature, pressure, speed, liquid flow rates, etc. Transmitting sensor information via a current loop is particularly useful when the information has to be sent to a remote location over long distances (1000 feet, or more). The loop’s operation is straightforward: a sensor’s output voltage is first converted to a proportional current, with 4mA normally representing the sensor’s zero-level output, and 20mA representing the sensor’s full-scale output. Then, a receiver at the remote end converts the 4-20mA current back into a voltage which in turn can be further processed by a computer or display module.