A regular image layer contains image information (pixel values) that combine with the information in other layers (if any) to form your image. An adjustment layer, on the other hand, does not contain any pixels. Instead, it contains instructions on how the pixels in the underlying layers will be affected. In this way, adjustment layers give you the ability to apply an effect to a group of layers, and then at any time in the editing process, alter that effect while preserving the integrity of original image.

 

It has been argued that using layers to apply repeated effects to an image can cause degradation in the original. If you change the colour or shade in an image, or apply an effect to a layer, you are changing the pixel information in that image or layer. If you don’t like how your edits turned out, you may have to make further changes to clear up the unwanted effects. All of these operations on the pixel values can degrade the image from its original “state.” For example, if you adjust the light and shade in an image, it is very difficult to adjust it back to its exact original state at a later time). In a sense, adjustment layers allow you to try effects and edits without affecting the integrity of the underlying image.

 

This is what an adjustment layer looks like in the Layers Palettes: