Activity Monitor is a utility included with the Apple OS X operating system. It monitors computer activity such as processor load, active processes, running applications, and the amount of memory being used.
Activity Monitor can be used to identify sluggish programs or programs not working correctly and is found in the Application folder, under the Utilities folder. Once launched, all processes running on the system at that moment are monitored and displayed in real time. From this application, many of the running applications can be stopped or killed, possibly freeing system memory or system resources. Processes can also be sorted based on pre-determined factors such as the process name, percentage of CPU active cycles, the CPU time usage, and can be filtered based up process type.
If you are more familiar with Microsoft Windows, you can think of the Activity Monitor as the Resource Monitor.