This phrase is used when acknowledging that you've understood something. Depending on the context of the situation and how you use it, it can have a different nuance.
When your parents start lecturing you or when your significant other nags you, you can say 알았어~~ ("I got it already...*Stop bothering me).
Or, it can be said just to say that you've understood. Like, if a friend says, "Meet me at exit 10 at Gangnam Station." You can say, "알았어."