When you create an object or stroke, when you apply a fill, or when you enter text, by default these items appear solid; that is, they have an opacity of 100%. You can make the items transparent in a variety of ways. For example, you can vary the opacity from 100% (completely opaque) to 0% (completely transparent). When you decrease opacity, the underlying artwork becomes visible through the surface of the object, stroke, fill, or text.

You use the Effects panel to specify the opacity an object, its stroke, its fill, or its text, You can decide how the object itself, its stroke, fill, or text blend with objects beneath. Where objects are concerned, you can choose to isolate blending to specific objects so that only some objects in a group blend with objects below them, or you can have objects knock out rather than blend with objects in a group.

For information on getting started with transparency (PDF), see www.adobe.com/go/learn_id_transparency_bp.

Areas of underlying objects appear through transparent object.