A junction built to break down safely
An ordinary diode is destroyed if reverse voltage pushes it into breakdown; a Zener diode is a silicon junction engineered to do exactly that, over and over, without damage. Heavy doping on both sides of the junction keeps the depletion region thin, so a moderate reverse voltage already produces a strong internal field. Below about 5 V the dominant mechanism is quantum-mechanical tunnelling — the true Zener effect — while above roughly 6 V it is avalanche multiplication instead; devices in between blend both. The datasheet does not distinguish them, since the external behaviour is the same.
The knee and the regulation region
Below the rated Zener voltage only a tiny reverse leakage current flows. Once the current reaches the knee current, the curve bends sharply and the device enters regulation: further increases in current raise the terminal voltage only slightly, by an amount set by the dynamic resistance, typically a few ohms to a few tens of ohms. That flatness is the entire point — over a wide swing in current, the voltage across the diode barely moves, which is why it can hold a steady reference or supply rail even as the current through it changes.
Reading the datasheet
Manufacturers specify the Zener voltage at a stated test current, together with the dynamic resistance measured at that same point, the knee current below which regulation is not guaranteed, and the maximum power dissipation the package can carry before the junction overheats. Because dissipation is voltage times current, a device with a higher Zener voltage must run at a lower current to stay within the same power rating. Temperature also shifts the voltage slightly — negative below about 5 V, positive above it — which matters in precision references.
Where it is used
Fed through a series resistor from a higher supply, a Zener diode forms the simplest voltage regulator: the resistor sets the current, and the diode clamps the output near its rated voltage regardless of moderate supply or load variation. The same clamping behaviour protects sensitive inputs from overvoltage, defines a stable reference for comparators and analog-to-digital converters, and shows up inside more elaborate linear and switching regulator ICs as the internal reference the rest of the circuit is built around.