Ambient occlusion (AO) is a feature that simulates the soft shadows that occur in creases, holes, and surfaces that are close to each another. These areas occlude (block out) ambient light, so they appear darker.
It works by approximating how much ambient light can hit a point on a surface. It then darkens creases, holes and surfaces that are close to each other.
You can use ambient occlusion to add realism to your lighting.
If Baked Global Illumination is enabled in your Scene, Unity can bake ambient occlusion into the lightmaps. This is known as Baked Ambient Occlusion.
To enable baked ambient occlusion in your Scene:
If Baked Global Illumination is not enabled in your Scene but you still want the effect of ambient occlusion, you can use a post-processing effect to apply real-time ambient occlusion to your Scene.
If Realtime Global Illumination using Enlighten (deprecated) is enabled in your Scene, the resolution for indirect lighting does not capture fine details or dynamic objects. We recommend using a real-time ambient occlusion post-processing effect, which has much more detail and results in higher quality lighting.
For information on real-time ambient occlusion post-processing effects, see the documentation on the post-processing effects.
To learn more about AO, see Wikipedia: Ambient Occlusion.