Dry Adiabatic Lapse RateThe dry adiabatic lapse rate is one degree Celsius of cooling for every 100 meters (1°C/100m, 10°C/kilometer or 5.5°F/1000 feet). Thus a dry (simply not saturated) parcel of air that rises 200 meters will cool two degrees, when it descends 200 meters, it will regain its original temperature because its temperature will rise two degrees. As the parcel of air rises and it cools, it will eventually cool to the dew point when condensation can begin and clouds will form.
Saturated Adiabatic Lapse RateAir that is saturated with water has reached the dew point temperature and is carrying as much moisture as that parcel of air is capable of holding at that temperature. This saturated parcel of air has a saturated adiabatic lapse rate (also known as wet adiabatic lapse rate) of 0.5°C/100 m (5°C/kilometer or 3.3°F/1000 feet). The saturated adiabatic lapse rate does vary with temperature.
If you're having trouble thinking about a parcel of air rising, think of a invisible balloon of air rising. As it rises, it cools as it expands. If it begins to descend it will compress and the temperature will increase.