Plain English Meaning
A code in a weather report that tells you the report came from an automatic weather station that can tell when precipitation is falling but cannot tell whether it is rain or snow.
Full Definition
A station type identifier used in METAR reports indicating the observation was generated by an automated weather station that does not have a precipitation discriminator. The station can detect that precipitation is occurring but cannot distinguish between liquid (rain) and frozen (snow) precipitation.
Context Anchor
You will see AO1 in the remarks section of a METAR, usually near the end of the report.
Derivation
The 'A' stands for Automated and 'O' for Observation. The '1' indicates the simpler of the two automated station types — one without the extra sensor that distinguishes rain from snow. is the more capable version.