Plain English Meaning
The aircraft and operator have been officially cleared by the FAA to fly in the band of high-altitude airspace where planes are stacked just 1,000 feet apart instead of 2,000 feet apart. This requires very accurate altitude equipment and approved procedures.
Full Definition
A designation indicating that an aircraft and its operator have received specific authorization from the FAA to operate in Reduced Vertical Separation Minimum (RVSM) airspace, which is the airspace between FL290 and FL410 where vertical separation between aircraft is reduced from 2,000 feet to 1,000 feet. To be RVSM approved, the aircraft must meet defined altitude-keeping equipment standards, and the operator must have approved maintenance and training programs.
Context Anchor
Seen in instrument procedures, high-altitude planning, notes, and that involve above about 29,000 feet.