A CSU/DSU (Channel Service Unit/Data Service Unit) is a hardware device that converts a digital data frame from the communications technology used on a local area network (LAN) into a frame appropriate to a wide-area network (WAN) and vice versa. Think of it as a high end modem which is used to connect a data terminal equipment (DTE), such as a router, to a digital circuit, such as a Digital Signal 1 (T1) line.
For example, if you have a Web business from your own home and have leased a digital line (perhaps a T-1 or fractional T-1 line) to a phone company or a gateway at an Internet service provider, you have a CSU/DSU at your end, and the phone company or gateway host has a CSU/DSU at its end, and the units at both ends must be set to the same communications standard.