It is our optical ability to perceive the world in three dimensions that enables us to determine the accurate distance of an object from us.

When we see the external objects, each of our eyes makes a slightly different image of the object (e.g., in terms of viewing angle or relative size). These slightly different images are processed by the brain to form a three-dimensional image and to gauge the accurate distance of the object from the observer.

Before explaining the depth perception process in detail, let’s briefly understand why depth perception is important. It is important because it helps us make an accurate judgement of the distance of things from us which helps us adjust our movement accordingly while walking or driving. Thus, it keeps us safe from many dangers. For instance, while walking on the beach, we may stop or change our direction when we sense that we reach the edge of the beach. Similarly, while walking, we sense out the distance of the ground and if we see a ditch on the ground, we may stop or change our direction because we sense depth (greater distance from the surface of the ground) of a ditch and thus it saves us from falling into the ditch. Likewise, while driving, we adjust the speed of our car according to our distance from other cars being driven on the same road.

Depth perception is a natural ability that is present in people generally at all ages. For instance, psychologists may assess the depth perception of an infant by putting the infant on a table. The infant plays in the mid area of the surface of the table but avoids crawling near the edge of the surface of the table. It shows that depth perception is present in individuals from a very early age, though this perception power strengthens with experience over the course of life.

Depth perception is a product of three components 1) each eye plays a separate role in perception, 2) both eyes play a combined role in the depth perception, and 3) the brain process the cues (signals) received from both eyes and turn them into a three-dimensional image.

Each of both eyes provides certain cues (signals) for depth perception which are primary in sensing out an external object. However, each eye may not independently provide the correct estimation of the distance of an object. This requires the combined role of both eyes to provide a basis for the correct estimation of the distance of an object. Using the basic cues, both eyes form slightly different images of the same object (in terms of viewing angle and relative size) which are combined in the brain for correct estimation of the distance.

Therefore, depth perception depends on two types of cues: monocular cues (cues coming from each eye as separate cues) and binocular cues (combined cues coming from both eyes), as explained below.

Mono means single and ocular means related to the eye. It means these are the depth cues that are provided by one eye as a result of viewing an object. It can be either of both eyes. Each of both eyes provides depth cues of viewing an object at the same time. However, when we say monocular cues, we refer to cues coming from one eye (any of both eyes) separately.
There are various types of monocular cues, as follows:

Motion parallax is a depth cue perceived when an observer changes his position relative to other things in the surrounding. When a person moves, the nearby object seems to be moving in the opposite direction to the person whereas the farther objects seem relatively stationery to the person. For instance, while you are driving a car, the nearer and closer objects (e.g., trees and houses) seem to be moving faster in the direction opposite to you, whereas the distant objects (e.g., hills) seems to be relatively stationary. This cue gives hint about the estimation of distance. This means that while an individual changing his position relative to other objects in the surrounding, the fast-moving objects are perceived as closer and nearer whereas the relatively stationary objects are perceived as faraway objects.

Optical expansion is a phenomenon in which the size of the image of an object increases as it moves closer to the observer. The optical expansion serves as a depth cue and helps in perceiving the distances of the objects. The faraway object looks smaller whereas the nearer object looks larger. In other, as the object comes closer, its image becomes large and larger. This changing size of the image of the object (formed on the retina of the eye) serves as a monocular cue.

Linear perspective is the depth cue, in which two parallel lines seems to converge as their distance increases from the observer. The two lines in fact do not converge but it is the optical illusion that makes them look converging at some point at a distance from the observer. For instance, if we stand on a road, we see the real width of the road (space between both edges of the road) at a point near to us, however, if we look at the part of the road which is at more distance from us, the road seems to us like it has narrowed down. The more distant we look at the lines (edges of the road in this example), the more converging they seem to appear. This is linear perspective cue also contributes to the estimation of distance.

Artists generally use this cue in drawing to represent faraway objects by making a three-dimensional image on a two-dimensional page.

Interposition means when one object blocks a partial view of another object. The object that is fully visible to us seems near to us whereas the object partially visible (partially covered by the other object) seems to be farther away from us. This depth cue allows us to perceive the distance of an object by sensing the relative sizes of other objects in the view.

Relative size is an important depth cue because 1) this directly gives distance estimation as smaller images on the retina are perceived as far away object whereas the larger image on the retina is perceived as a nearer object, and 2) the comparison between/among the relative sizes of all objects within the same view helps us to gauge the distance of the object accurately, for which we want to estimate distance.

Height perception also serves as a depth cue. Height itself is an indicator of distance. Therefore, the objects, that are higher in the field of vision, are perceived as far away objects, whereas those at relatively lesser height are perceived as nearer objects. To understand this, look at the wall in front of you. Move your eyes upwards starting from the lowest point of the wall to the highest point of the wall. As you move your head upwards, the upper portion of the wall will seem to be farther away while the lower part of the wall seems to be nearer to you.

Lightning and shadowing also provide depth cues about the distances of an object. Objects that are nearby to us reflect more light as compared to those which are distant. Thus, the brighter objects give us the cue of being nearer to us while the relatively darker objects seem to be farther away from us. 

The surface of every object has a texture gradient. Objects nearer to us provide a clear view of its texture where the finer details of the texture are visible. On the other hand, the faraway objects do not provide a clear view of their texture where varying degrees of blur-effect on their texture may be observed depending on their distance from the observer.

Binocular depth cues are the cues that are perceived when we view a scene with both of our eyes. Two main binocular cues are as follows.

The eyeballs move inwards and outwards depending on the distance of an object we are looking at. To look at a nearby object, we turn our eyes inward. This phenomenon is known as convergence. The nearer an object is to us, the more we converge or move our eyes inwards. To understand this, take a pencil, hold it at some distance from your eyes and look at it. Now slowly bring it closer to your eyes. You will notice that the closure you bring the pencil to your eyes, the more you converge your eyes to look at it. You can feel it by the strain in the muscles of your eyes if you look at the pencil keeping it near to your eyes for a few seconds.

This is a binocular cue because both the eyes engage in this perception. 

Human eyes are spaced, and each eye occupies a different position. When an object is viewed, each retina forms a slightly different image of the object such as in terms of viewing angle and relative size. This means two slightly different images of the object are formed in the eyes. This phenomenon is referred to as retinal disparity or binocular disparity. To understand this, simply close your left eye keeping your hand on it and look at things in your surrounding (e.g., in your room) with your right eye. Now, without changing the position of your head, close the left eye, and open the right eye to look at the same things in your surroundings. You will notice a slight difference in the images seen by both eyes.    

As noted, both the eyes form two slightly different images. Each image formed on the retinas of both eyes has slightly different attributes such as its dimensional shape, size and viewing angle. This is because the eyes are spaced from each other in such a way to detect these differences so that these differences can be summed up into a single three-dimensional image of the object.

These slightly different images, in the form of electrochemical impulses, are carried through nerves from the eyes to the brain. The brain processes these two different images to form a single three-dimensional image of the object. This is the reason that though our eyes form two different images, but we see it as a single image. This three-dimension image helps us understand the distance of the object or objects in the same view.