Annato seed is also known as achiote. This seed grows on the annato tree. It is used primarily in Mexican and Caribbean cooking to impart a rich yellow/orange color. Annato seed makes a good substitute for saffron's golden coloring, at a fraction of the cost. It does NOT, however, duplicate saffron’s unique flavor!
Another popular use for annato seeds is to make achiote oil. Cook the seeds in hot oil until their skin dissolves. When the oil turns bright yellow, discard the seeds and use the oil for cooking.
The seeds can also be ground with garlic and any variety of chili peppers for adobo paste.