A diffuser, in an automotive context, is usually a shaped section of the car underbody which improves the car's aerodynamic properties by enhancing the transition between the high-velocity airflow underneath the car and the much slower freestream airflow of the ambient atmosphere. It works by providing a space for the underbody airflow to decelerate and expand so that the boundary between the car's airflow and "external" airflow is less turbulent, and it also provides a degree of "wake infill" (the wake being a turbulent area of low pressure that is caused by the passage of the vehicle through the air; this can cause pressure drag).
As the air enters towards the front of the car it accelerates and reduces pressure. There is a second suction peak at the transition of the flat bottom and diffuser. The diffuser then eases this "high velocity" air back to normal velocity and also helps fill in the area behind the race car making the whole underbody a more efficient downforce producing device by reducing drag on the car and increasing downforce.