Plain English Meaning
A scheduled inspection that proves the aircraft's transponder is working correctly. It must be done by a qualified technician at least once every 24 months, and the aircraft cannot legally fly IFR or in most controlled airspace without a current one on the books.
Full Definition
A required functional check of an aircraft's transponder and altitude reporting equipment, performed and certified by an authorized technician within the preceding 24 calendar months, to confirm the equipment meets the performance standards required for operation in controlled airspace under instrument flight rules.
Context Anchor
Seen during IFR preflight planning, aircraft record checks, and before flying in where a transponder is required.