The Pen Tool uses a technique called curve fitting to create a smooth curve from a freehand path that is drawn by using a Click/Drag combination to drag the tool to desired points on the Drawing Canvas.
To use the tool, simply select it, and then draw a freehand path by using a Click/Drag combination to maneuver the pen. The Pen Tool converts the drawn path into a smooth curve once the click action is released.
The following figure illustrates what a curve looks like when drawn by hand, and then what it looks like after the Pen Tool has created the curve.
Note: The Pen Tool can create shapes instead of paths by using the Shift key in conjunction with the pen tool. Holding down the Shift key during shape (path) drawing creates a closed shape instead of an open path.