You probably know the word où as a question word meaning Where...?, as in

Où est-ce que tu travailles ?
Where do you work?

Où is also a relative pronoun which can be used to connect two clauses, just as qui and que do above:

Le restaurant où je travaille s'appelle Macdo.
The restaurant where I work is called McDonald's.

Où, as a relative pronoun, is used with places. It replaces à + 'noun of location' (or sometimes dans + 'noun of location'):

Le restaurant s'appelle Macdo.
              Je travaille à ce restaurant.     ('ce restaurant' is a place)
Le restaurant où je travaille s'appelle Macdo.

La ville où je passe mes vacances d'hiver s'appelle Aspen.
(The town where I spend my winter vacation is called Aspen.)

(où here replaces a repetition of à+ name of town)
La ville s'appelle Aspen.
Je passe mes vacances d'hiver à Aspen.

For lot of the occasions when où is used, in English we would say 'where', as in the examples above. But où is used more widely in French, for anything that is considered a place.

Le lit où je dors est trop confortable le matin.
(The bed in which I sleep is too comfortable in the morning.)
(or: The bed which I sleep in is too comfortable in the morning.)
(or: The bed           I sleep in is too comfortable in the morning.)

Le lit est trop confortable.
Je dors dans ce lit.

In fact où is is also used for time expressions (when, in English, we would use 'when').

Je me souviens du jour où j'ai commencé mon travail.
(I remember the day (when) I started my job.)
Ah ! 1993 ! C'est l'année où je suis tombé amoureux.
(Ah! 1993! The year (when) I fell in love.)


Summary

Use où to replace:

à
+
 noun indicating location when creating a relative clause.
à
+
 noun indicating time