The purpose of a rectifier is to convert an AC waveform into a DC waveform. Rectifier use components called diodes to convert AC into DC. A diode is a device which only allows current to flow through it in one direction. In this direction, the diode is said to be 'forward-biased' and the only effect on the signal is that there will be a voltage loss of around 0.7V. In the opposite direction, the diode is said to be 'reverse-biased' and no current will flow though it.
Figure 2 shows the AC input waveform to this circuit and the resulting output. As you can see, when the AC input is positive, the diode is forward-biased and lets the current through. When the AC input is negative, the diode is reverse-biased and the diode does not let any current through, meaning the output is 0V. Because there is a 0.7V voltage loss across the diode, the peak output voltage will be 0.7V less than Vs.