1. A Japanese term for animation.
2. In America, used to refer to a particular style of art common to Japanese animation and comics.
3. In America, also used to refer to Japanese animation as a whole. The Japanese approach to art and storytelling is distinctive, at least to Americans, and has earned anime quite a few fervent fans and as many detractors. Still, regarding "anime" as a genre is misleading; it's really just a medium, whose subjects encompass drama, comedy, action, children's entertainment, pornography, and what have you. As with any form of entertainment, some of it is good, some is bad, most is in between, and no one will ever agree on what titles are which.
The increasingly popular localization of anime in America is a subject of great controversy among its fans.