One of the Gifts of the Holy Spirit:
Understanding is one of the seven gifts of the Holy Spirit enumerated in Isaiah 11:2-3. They are present in their fullness in Jesus Christ, Whom Isaiah foretold (Isaiah 11:1), but they are available to all Christians who are in a state of grace. We receive the seven gifts of the Holy Spirit when we are infused with sanctifying grace, the life of God within us—as, for example, when we receive a sacrament worthily. As the current Catechism of the Catholic Church notes, "They complete and perfect the virtues of those who receive them."
The Second Gift of the Holy Spirit:
Understanding is the second gift of the Holy Spirit, behind only wisdom. It differs from wisdom in that wisdom is the desire to contemplate the things of God, while understanding allows us, as Fr. John A. Hardon writes in his Modern Catholic Dictionary, to "penetrate to the very core of revealed truths." This doesn't mean that we can come to understand, say, the Trinity the way that we might a mathematical equation, but that we become certain of the truth of the doctrine of the Trinity. Such certitude moves beyond faith, which "merely assents to what God has revealed."
Understanding in Practice:
Once we become convinced through understanding of the truths of the Faith, we can also draw conclusions from those truths and arrive at a further understanding of man's relation to God and his role in the world. Understanding rises above natural reason, which is concerned only with the things we can sense in the world around us. Thus, understanding is both speculative—concerned with intellectual knowledge—and practical, because it can help us to order the actions of our lives toward our final end, which is God. Through understanding, we see the world and our life within it in the larger context of the eternal law and the relation of our souls to God.