ADAM
From BioShock Wiki
ADAM is the raw form of the unstable stem cells harvested and processed from a type of sea slug parasite. It acts like a seemingly benign form of cancer, destroying native cells and replacing them with the unstable stem versions. While it is this instability that gives it its amazing properties, it is also what causes the cosmetic and mental damage. In the end the instability of the stem cells means that the user will have to take in more and more ADAM just to keep back the tide (this part Fontaine took note of).
ADAM was discovered by Tenenbaum in a sea slug that had bitten one of Rapture's dock workers and healed his long-crippled hand. However, the sea slugs alone could not provide enough ADAM for experimentation and work, let alone marketing. But when the slug is embedded in the lining of a host's stomach it was discovered that, through regurgitation, they could have twenty to thirty times the yield of usable ADAM. This was the original purpose of the little sisters and the orphanage.
[edit] Game use
ADAM is used for character growth. The player can spend ADAM at a Gatherer's Garden to gain Plasmids and Gene Tonics to modify himself and give himself new and/or enhanced abilities.
ADAM is mainly retrieved from Little Sisters. There is a choice regarding whether to rescue the Little Sister by using a special plasmid given to you by Tenenbaum which removes their symbiotic relationship with the slug and allows her to live (curing her), but gaining only 80 ADAM, or by forcibly extracting it and receiving the full 160 ADAM, but at the cost of ultimately killing the Little Sister (described in the audio diary Gatherer's Vulnerability as removing life support from a terminal patient). While choosing to rescue the little sisters provides less Adam in the short term a gift will be placed in a teddy bear at a gatherer's garden that contains more Adam and special tonics and supplies.
This choice also affects the ending, see storyline for more details.

