Perl is compiled, but it doesn't give that impression because it does not save an executable image. Instead, compilation is done on startup (like an interpreter), then the compiled program is automatically run.

The compiler produces a parse tree for the perl statements it encounters, then the runtime walks through the parse tree executing the primitives it finds there. Details may be found in the Camel Book, or in the perl documentation.

Update: perlguts and perlcompile have the most clues to how perl works. Note that perl can drop into compiling from running and vice versa with eval, BEGIN blocks, and so on.

After Compline,
Zaxo