There are two functions of a re-entry permit:
1. It allows a permanent resident of the U.S. to reenter the U.S. after traveling abroad for longer than one year but less than two years. Usually, if a permanent resident travels abroad for a period longer than one year, s/he risks denial of admission into the U.S. on the ground that s/he has abandoned his or her permanent resident status. A re-entry permit is designed to solve this problem.
2. It serves as a passport for a permanent resident of the U.S. if s/he has no passport and cannot obtain it from the country of his/her nationality.
Please note that an absence of more than 180 days from the U.S. will sever the 5-year continuous residence period requirement necessary for the naturalization process to become a citizen, even if a re-entry permit is obtained.