Absorption sucks up extra frequencies so there’s not a bunch of harsh sounds bouncing around the room. The two main types of absorption are bass traps and acoustic foam panels. These absorb reflected frequencies, leaving only the direct sound (the sound that goes directly from the voice or instrument into the mic).
Bass traps go in the top corners of your room (where the ceiling meets two walls) and they’re the more important type of absorption. The top corners cause the most sound reflection in a room because there are more surfaces right near each other for sound waves to bounce off of. Bass traps absorb mainly bass frequencies, but they also do a good job of trapping mid-high frequencies.
After the corners are treated, the next most important places to treat are the long corners — where a wall meets the ceiling, the floor, or another wall. Here you can use acoustic panels, but leave a bit of space in between the panel and the corner — about enough room for your finger to fit into. This allows for good bass frequencies to not get totally muddled.
And lastly, you should place acoustic panels on the walls themselves. People usually put them in diamond or square shapes.
You can also use some diffusion, but only if you have a bigger room. Diffusion diffuses the sound, spreading it around evenly. If you have a big room, try hanging a diffuser at eye height or above. It should help things sound more balanced.
For a more in-depth look at treating your home studio, check out:
The Home Studio Guide to Affordable Soundproofing and Acoustic Treatment.