From How Electric Guitars Work:

To produce sound, an electric guitar senses the vibrations of the strings electronically and routes an electronic signal to an amplifier and speaker. The sensing occurs in a magnetic pickup mounted under the strings on the guitar’s body.

This pickup consists of a bar magnet wrapped with as many as 7,000 turns of fine wire. If you have read How Electromagnets Work, then you know that coils and magnets can turn electrical energy into motion. In the same way, they can turn motion into electrical energy. In the case of an electric guitar, the vibrating steel strings produce a corresponding vibration in the magnet’s magnetic field and therefore a vibrating current in the coil.

There are many different types of pickups. For example, some pickups extend a single magnet bar under all six strings. Others have a separate polepiece for each string.

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