A data type which contains itself. The commonest example is the list type, in Haskell:
data List a = Nil | Cons a (List a)
which says a list of a's is either an empty list or a cons cell containing an 'a' (the "head" of the list) and another list (the "tail").
Recursion is not allowed in Miranda or Haskell synonym types, so the following Haskell types are illegal:
type Bad = (Int, Bad) type Evil = Bool -> Evil
whereas the seeminly equivalent algebraic data types are acceptable:
data Good = Pair Int Good data Fine = Fun (Bool->Fine)