Humidity can be measured in several ways, but relative humidity is the most common. In order to understand relative humidity, it is helpful to first understand absolute humidity.

Absolute humidity is the mass of water vapor divided by the mass of dry air in a volume of air at a given temperature. The hotter the air is, the more water it can contain.

Relative humidity is the ratio of the current absolute humidity to the highest possible absolute humidity (which depends on the current air temperature). A reading of 100 percent relative humidity means that the air is totally saturated with water vapor and cannot hold any more, creating the possibility of rain. This doesn't mean that the relative humidity must be 100 percent in order for it to rain -- it must be 100 percent where the clouds are forming, but the relative humidity near the ground could be much less.

Humans are very sensitive to humidity, as the skin relies on the air to get rid of moisture. The process of sweating is your body's attempt to keep cool and maintain its current temperature. If the air is at 100-percent relative humidity, sweat will not evaporate into the air. As a result, we feel much hotter than the actual temperature when the relative humidity is high. If the relative humidity is low, we can feel much cooler than the actual temperature because our sweat evaporates easily, cooling us off. For example, if the air temperature is 75 degrees Fahrenheit (24 degrees Celsius) and the relative humidity is zero percent, the air temperature feels like 69 degrees Fahrenheit (21 C) to our bodies. If the air temperature is 75 degrees Fahrenheit (24 C) and the relative humidity is 100 percent, we feel like it's 80 degrees (27 C) out.

People tend to feel most comfortable at a relative humidity of about 45 percent. Humidifiers and dehumidifiers help to keep indoor humidity at a comfortable level.

Source: http://www.cmhc-schl.gc.ca/en/index.cfm