How the out-of-phase “Greeny” tone actually works
A sunburst Gibson Les Paul — the neck pickup (nearest the fretboard) is the one reversed in the “Peter Green mod”
The Peter Green mod flips the magnet in a Les Paul's neck humbucker so it is magnetically out of phase with the bridge pickup. In the middle switch position this produces the thin, honky, “Strat-through-a-Marshall” tone heard on Greeny.
The “Peter Green mod” is one of the most sought-after tones in electric guitar — and it started as a mistake. When Green's 1959 Les Paul had its neck pickup reinstalled backwards, the pickup's magnet ended up with reversed polarity.
The key detail, confirmed by later analysis, is that it's the magnet polarity, not the wiring, that matters: one pickup's magnet points north-to-south, the other south-to-north. With both pickups selected (the middle position), they partially cancel, producing a thin, nasal, vocal sound — very different from a normal Les Paul's fat middle tone.
To recreate it, guitarists flip the neck-pickup magnet on a humbucker so it's out of phase with the bridge — hence the name. It's a reversible, solder-light modification, which is why it has become a rite of passage for blues-rock players chasing that Fleetwood Mac sound.
Is the Peter Green sound from the wiring or the magnet?
The magnet. Later analysis showed it was the reversed magnetic polarity of one pickup — not the wiring — that produced the out-of-phase tone.
Which switch position gives the out-of-phase sound?
The middle position, with both pickups on. Individually each pickup sounds normal; the effect appears only when they're combined.
Sources: Greeny (guitar), Wikipedia · GuitarPlayer — the secret of the tone · Thalia Capos — why it sounds that way