The Shape Builder tool is an interactive tool for creating complex shapes by merging and erasing simpler shapes. It works on simple and compound paths.
It intuitively highlights edges and regions of the selected art, which can be merged to form new shapes. An edge is defined as the section of a path, which does not intersect any other path of the selected objects. A region is a closed area bounded by edges.
By default, the tool is in merge mode where it allows you to combine paths or regions. You can also switch to the erase mode to delete any unwanted edges or regions by pressing Alt (Windows) or Option (Mac).
For a video on creating new shapes using the Shape Builder tool, see www.adobe.com/go/lrvid5203_ai_en.