This built-in variable is created for every instance in a room and contains the layer ID value of the layer that the instance is assigned to. This value can then be used in other functions like layer_get_depth() or it can be changed to move the instance to another layer, but note that if the layer being assigned does not exist in the current room, then you will get an error that will force your game to close. When assigning a layer, you must supply the unique layer ID as returned by the function layer_get_id() (when using named room layers), or as returned by the function layer_create() (when you create your own layers at run time).
IMPORTANT If you have created the instance using the instance_create_depth() function, or have manually changed the depth variable, the layer assigned to the instance becomes a "managed" layer, which is one that GameMaker controls and manages automatically. In these cases the layer variable will return -1.
layer;
layer = layer_create(-1000);
The above code will create a new layer with a depth of -1000 and then set the instance layer variable to the returned layer ID, moving the instance from the layer it is currently on to the new layer being created.