The recirculation valve is operated from the depression in the air inlet, upstream of the turbo and downstream of the throttle valve. When the throttle valve is closed and the pressure in the inlet drops, the valve opens and air from the discharge side of the compressor is diverted back into the inlet of the compressor. This helps to avoid the compressor going into surge, for instance when accelerating hard and changing gear, the inlet pressure and air flow drops rapidly whilst the turbocharge speed is still high.The air that is recirculated allows the compressor to avoid the " surge line " on the compressor map.
Note: a recirculation valve is in fact a blow-off valve integrate in the compressor housing.