Auto-canceling is the act of landing during the beginning or ending frames of an aerial attack, which will make the player go into their normal landing animation from a jump (of which the landing lag tends to be around 2-6 frames depending on the character, a very short amount of time); thereby circumventing the landing lag that would have occurred had the character instead landed during the middle of that attack's animation which can be a significant amount of time depending on the aerial.
When an aerial is performed, it will not immediately make the player go into their aerial landing animation if they land. Instead, they will enter their normal landing animation and the game has to call for a command in order to enable the aerial to enter its landing animation. The period of time before this command is called for is known as the initial auto-cancel window. When this command is disabled, the character will then enter their normal landing animation for the rest of the aerial's duration. This is known as the late auto-cancel window. If an aerial does not have an initial auto-cancel window, the character will enter their aerial landing animation as soon as the aerial begins (if they land). If an aerial does not have a late auto-cancel window or if the late auto-cancel window occurs after the animation has ended, the character will enter their normal landing animation once the aerial's animation has finished (interruptibility does not affect this). If the command for the aerial to enter landing lag is never called for, the aerial will always auto-cancel although this is extremely uncommon.
Most aerial attacks can be auto-cancelled during both the first few frames and the last few frames of the attack's animation; however, some attacks do not have an initial auto-cancel window, a late auto-cancel window, or even both. Each individual aerial attack for every character has a specific auto-cancelling window (or lack thereof) that must be memorized and practiced. Late auto-cancel windows are also significantly more beneficial as almost all initial auto-cancel windows end before an aerial's hitbox comes out making them irrelevant in most situations.
Auto-canceling can be very beneficial to players using characters with laggy aerial attacks (granted they have an early enough late auto-cancel window), as this can reduce the amount of landing lag produced, and create more time for the character to act, potentially avoiding being punished during the move's landing lag. Precise auto-canceling of aerials is also frequently needed for performing followups and combos, so as to leave less time for the opponent to react and escape.
Differences between games
In Super Smash Bros., auto-cancelling generally has no large impact on gameplay, since Z-Cancelling practically has the same effect, although some moves do have extremely lenient auto-cancel windows. A notable example is Ness's down/up aerial, which will always auto-cancel. These moves can be used for shield breaks, which requires many inputs, so the lack of needing to z-cancel makes the shield break significantly easier. All aerials except for Link's up and down aerials are capable of auto-canceling in a short hop.
Super Smash Bros. Melee reduced the effect of L-canceling (now only halving the landing lag as opposed to reducing it to 4 frames), making auto-canceling more useful, although jumps are shorter than they were in Smash 64 due to gravity being increased across the board, and auto-cancel windows are far less lenient across the board, making a lot less aerials capable of auto-canceling in a short hop.
Super Smash Bros. Brawl removed L-canceling, making auto-canceling more important and useful, as while numerous aerials have lower landing lag, none of them had their landing lag reduced enough to completely compensate for the removal of L-canceling. Aerial attacks in Brawl generally have more lenient auto-cancel windows, which is further compensated by gravity/falling speeds being much lower than in Melee. A lot more aerials can be auto-cancelled in a short hop in Brawl compared to Melee because of these changes.
In Super Smash Bros. 4, L-canceling continues to be absent, and aerials overall have slightly increased landing lag and later auto-cancel windows, hindering aerial approaches and enforcing a heavier reliance on grounded combat. While some aerials gained the ability the auto-cancel in a short hop, a majority lost their ability to do so either because of their worse auto-cancel windows, the character's lower short hop or both.
In Super Smash Bros. Ultimate, however, since the landing lag on moves has been altered and substantially reduced across the board, aerial approaches have become safer than previously. Aerials are also considerably weaker when performed during a short hop with these changes overall making auto-canceling less useful depending on the aerial. However, many aerials (e.g. Falco's down aerial) have improved auto-cancel windows enabling them to properly auto-cancel in a short hop although naturally, the opposite is also the case with some aerials (e.g. Ike's forward aerial) and some characters are now unable to auto-cancel certain aerials due to their higher gravity reducing the height of their short hop (e.g. Charizard's forward aerial).
The following characters' respective moves have notable auto-cancels.
List of characters who can auto-cancel all aerials in a short hop
* As of version 2.0.0.
** As of version 6.0.0.