They break the matzo in two, returning the smaller piece to the stack and putting aside the larger piece to be eaten later during Tzafun ("Hidden", the twelfth part of the Seder,  which immediately follows the main meal). This is the afikoman, which is wrapped in a napkin before being hidden.
During the Seder meal, they divide the matzo into two pieces, setting aside the smaller portion for later consumption during Tzafun and placing the larger piece aside as the afikoman, which is then hidden from view.