What is an IIS application pool?

An application pool is like a pond, if I create 2 application pools, first application pool has 100 fishes and another application pool has 200 fishes, here fish is like an application in application pool. They are managed by worker processes. Best advantage is: if pond number-1 has bad water and cases all fish are effected then there is security of fish in pond number-2. Like this if any application pool is affected by any problem but there is not any effect of this problem in application pool 2 so security improves, and another benefit is that is you provide all the necessary authentication and rights to all applications in a single application pool.

An application pool is a group of one or more URLs that are served by a worker process or set of worker processes. Application pools are used to separate sets of IIS worker processes that share the same configuration and application boundaries.

application pool provides isolation for your application. and increase the availability of your application because each pool run in its own process so an error in one app won't cause other application pool. And we have shared pool that hosts several web applications running under it and dedicated pool that has single application running on it.