ISO is the measure of sensitivity of your light sensor to capture light during an exposure.  More simply, in application, this is the indication of how smooth or grainy your image will be.  This is a really simple concept that impacts your photography a ton. 

When you take a photo, you release the shutter, allowing light to pass through the aperture, where the image sensor (or just “sensor”) reads the light and turns it into the image.  The sensor has a varying degree of sensitivity to the light, the ISO.  Higher sensitivity to light means an increased ability to correctly expose an image with less available light.   But on the flip side, the increased sensitivity is associated with a decrease in image quality (an addition of grain or noise).

ISO is notated starting at 100, and then doubles- both in naming convention and in sensitivity- with each increment up: 100, 200, 400, 800, 1600, 3200, 6400.  Each time the sensitivity doubles, the required light halves.  This means that all other settings exactly the same, an image shot at ISO 1600 will show more light than if shot at ISO 100.  It will also show grain, where the ISO 100 image would not.  So, you are paying for a lower light requirement with a lower quality, ie grainy, image.  You have control over ISO when shooting in all non-automatic modes on a DSLR.  Consult your user manual for how to do this with your specific camera model.

These photos are all taken at f/2.8 with a shutter speed of 1/80 but with different ISO settings.  There's no post-processing done to any photo, and they are intentionally not the ideal exposure to illustrate ISO.

As the ISO in increased, the camera's sensitivity to light also increased- meaning, the camera captured more light in in the same 1/80th of a second exposure with aperture at f/2.8.    But remember, you are paying for the ability to shoot in low light with a decrease in quality.  The photos below show blown up portions of the above images.  Again, I realize the exposures aren't ideal-  but look at the "noise" that you see in the ISO 3200.

The lowest possible ISO for your camera (typically 100 or 200 depending on your model) is the highest possible quality image it can produce.  It follows then that you should always shoot in the lowest possible ISO for your specific light situation.  When there isn’t enough light available, increase the ISO to lower your light requirement.  Do so sparingly!  Remember that increasing ISO means decreasing quality.

Putting this theory into practice, what ISOs are used in what situation?  I’m a portrait photographer, so these are my guidelines:

100/ 200 – Outside in broad daylight

400/ 800- Outside in shade or overcast day

1600- Inside with or without a flash

3200/ 6400- Night, very low light venues

These are just a starting point.  I’ll always set the camera up in these ranges, and then take some test shots with the appropriate aperture/ shutter speed to see the lowest possible ISO I can use. 

Since I’m a portrait photographer who photographs moving subjects, I always need to be aware of my minimum shutter speeds to stop motion (check out the Shutter Speed Snap!torial here).  For other types of photography when there aren’t moving subjects, you can decrease your shutter speed, which would negate your need to increase the ISO.  Nighttime cityscape images are typically taken with a low ISO (opposite of my guidelines above) because they are more interested in the quality of the image than in taking it in 1/100^th of a second.  When playing with long exposures, keep the ISO low!

Happy shooting!