They're is a contraction of two words: they and are. When you say “they're coming to the party,” you're really saying “they are coming to the party.” The apostrophe shows where the letter a from are was removed to make the words flow together.

This word gets confused with two others that sound exactly the same: their (which shows ownership, as in “their backpacks”) and there (which refers to a place, as in “over there”). When you're writing and not sure which one to use, try replacing it with “they are” in your sentence. If “they are” makes sense, then they're is correct. If it doesn't, you need one of the other two.

Contractions like they're make our speech and writing feel more natural and conversational. You'll see them everywhere in stories, emails, and casual writing. Just remember: if you can split it back into “they are,” you're using the right word.