It is used to indicate a location, often in response to a question like "Where is it?" or "Where are you?".
For example:
* ¿Dónde está el baño? (Where is the bathroom?)
* Aquí. (Here.)
"Aqui" can also be used as a conjunction, meaning "in this place". For example:
* Aquí hay un libro. (There is a book here.)