Internal wastegates are built into the turbine housing and consist of a “flapper” valve, crank arm, rod end, and pneumatic actuator. It is important to connect this actuator only to boost pressure.

External wastegates are added to the exhaust plumbing on the exhaust manifold. The advantage of external wastegates is that the bypassed flow can be reintroduced into the exhaust stream further downstream of the turbine, reducing turbulence between the wastegated gasses and the normal exhaust flow, and thus flowing more freely. On racing applications, this wastegated exhaust flow can be vented directly to atmosphere.

Not only can you achieve higher boost levels, but by keeping the wastegate closed as long as possible, you will the turbo will spool faster. The wastegate arm (internal) holds a valve shut until it sees boost. Once boost enters the wastegate actuator it slowly opens the valve until the boost level peaks. Keeping the valve closed the longest amount of time possible will allow the exhaust to spin the turbine faster, instead of being bypassed (and thus, 'wasted') into the exhaust.