Neo taking the red pill.
“ You take the blue pill, the story ends. You wake up in your bed and believe whatever you want to believe. You take the red pill, you stay in wonderland, and I show you how deep the rabbit hole goes.
”― Morpheus, to Neo[src]
The term redpill refers to a human that is aware of the true nature of the Matrix. Redpills are typically humans whose bodies and minds have been freed from the power plant by Zion hovercraft teams, but humans still connected to the Matrix can also be aware of its reality. Usually, Redpills encounter anomalies or glitches in the system, or may free themselves from physical bonds by exceeding human limitations. In either of these cases, other Redpills find them and offer them freedom.
Function
The term gets its name from the color of the virtual pill given by a hovercraft operative (who has re-materialized inside the Matrix as an avatar) to a human still living out a life within the Matrix. The pill is actually a tracing program that disrupts the carrier signal of the pod-human's mind, making it possible for a hovercraft operator to locate the pod that holds the human, and sending commands that force it to go offline and awaken its inhabitant.
Humans who suddenly awaken appear to be instantly rejected by docbots, who disconnect them from their pod's umbilicals and eject their body to the old sewer system of the ancient human cities, where the hovercraft crew retrieves the freed human.
It's important to note that resistance members make it a rule to only free someone from the Matrix before they reach a certain age. Removing a bluepill who has lived long enough in the Matrix could be dangerously overwhelming for them to the point where they're driven insane or even suicidal in their inability to accomodate themselves to the real world. There are occasional exceptions to this such as when Morpheus had to free Neo in spite of his initial denial of the truth as Morpheus truly believed he was The One.
Abilities and Personal Lives
Neo waking from his pod.
After some time, Redpills would eventually adapt to the harsh and brutal lifestyle of the real world. They make a home and are welcomed among the denizens of Zion. Redpill names are made by individual preference and can refer to anything regarding religion, philosophy, mythology, wildlife, literature, culture, technology and computer science. They may also choose to retain their original bluepill names if they please. Most redpills usually become part of the crew that rescued them and are trained to become Zion operatives while others find a place in Zion.
Occasionally, a redpill may wish to return to the ostensibly, more comfortable lifestyle within the Matrix despite it's illusory nature. Needless to say, this is extremely hazardous as it usually involves making arrangements with machines or Agents in exchange for information about Zion's defenses.
Of all of Zion's inhabitants, only humans who are born within the Matrix can become operatives that can re-enter the Matrix, as they have the headjack that allows their minds to be re-transmitted back into the Matrix's broadcast network.
Apart from those that self-substantiated, all humans who have escaped the Matrix have taken a red pill. It is believed that a redpill's RSI is different than a bluepill's, enabling Agents to easily track them in sensitive areas.