A Static Mesh is a piece of geometry that consists of a set of polygons that can be cached in video memory and rendered by the graphics card. This allows them to be rendered efficiently, meaning they can be much more complex than other types of geometry such as Brushes. Since they are cached in video memory, Static Meshes can be translated, rotated, and scaled, but they cannot have their vertices animated in any way.
Static Meshes are the basic unit used to create world geometry for levels created in the Unreal Engine. These are 3D models created in external modeling applications (such as 3dsMax, Maya, Softimage, and so on) that are imported into the Unreal Editor through the Content Browser, saved in packages, and then used in various ways to create renderable elements. The vast majority of any map in a game made with Unreal will consist of Static Meshes, generally in the form of Static Mesh Actors. Other uses of Static Meshes are for creating movers such as doors or lifts, rigid body physics objects, foliage and terrain decorations, procedurally created buildings, game objectives, and many more visual elements.