Challenge Rating
A monster's Challenge Rating (CR) tells you how difficult it is to fight. If a party of 4 heroes encounters a monster with a CR equal to its average level, the heroes should triumph over it, but the encounter should drain the party of 20-30% of its resources (spells, hit points, magic items, and so forth). A monster's Challenge Rating is the best yardstick to determine whether or not it is an appropriate encounter for your heroes; remember that heroes who have already faced several encounters are weaker than those at full power, so an ordinarily average monster might prove deadly in such circumstances.
Also, some monsters are more challenging if they are encountered in certain environments. Undead, for example, do not need to breathe, so an undead creature in a room full of poison gas or under water is more challenging than one in a 10-foot-by-10-foot room. A monster's Challenge Rating does not take into account the fact that it might have an advantage in certain circumstances; it is up to you to determine whether the environment (or some other situation) makes a monster more challenging than its CR implies.
Some monsters — particularly the villains in Chapter 2 — have magic items they can use against heroes. The power of these items is already taken into account in setting these beings' Challenge Ratings. Also, some villains have slightly different Challenge Ratings than what you might expect based on their character levels, Hit Dice, and templates. (For example, several villains get the elite template as a bonus that does not increase their CR, simply because they need the extra hit points to survive against epic-level heroes.)
A monster's Challenge Rating also determines how many experience points (XP) it provides to heroes who defeat it. See Chapter 6: Awarding Experience Points for more information.
See the Monster Charts in Appendix 2 for a list of monsters in this book organized by Challenge Rating.
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