Compasses work using magnetic fields. Here on Earth, a compass would
point towards magnetic north. A compass will align its self with the
strongest magnetic field in the region. This is why if you get a magnet
and hold it close to a compass, it will change the direction it is
pointing.
As you leave the Earth and move into space the magnetic field will
get weaker. Even though the field is weaker, the compass can still align
with it meaning that a compass on the International Space Station would
still be a reliable guide to the North Pole.
If you choose to go further away, things would get a little more
interesting. If you move far enough away from Earth you will reach a
point where the Sun’s magnetic field will be stronger than the Earth’s.
At this point, your compass would swap allegiance, and would begin
pointing towards the Suns magnetic north pole.
Of course, if you were to send a compass right out into intergalactic
space, the space between galaxies. Then you compass would probably not
work at all. A stronger compass will detect fainter magnetic fields, but
get far away enough from a magnetic source and your compass would not
point anywhere.
