Plotinus follows Plato in dividing things into two categories, the noumena, things known by means of "nous" (mind or reason), and the phenomena, material things known by means of the senses. Reality is a cosmos with a hierarchical structure. The most important thing in the structure is the One, or the divine, from which all other things emanate. Just below the one in this hierarchy are the Soul and Intelligence and below them the Forms or Ideas. These constitute an "intelligible" universe, known by the mind. In so far as humans have divine souls and reason they can come to know the intelligible universe, albeit imperfectly, by contemplation.
Sensation is a material phenomenon which enables living beings to perceive the "sensible" (i.e. known through the senses) world. This world is a pale and corrupted echo of the intelligible one. While the form or idea of the good or the form or idea of the color "red" exists in the intelligible world, what is perceived in the sensible world is a faint echo of those forms. A central problem for Platonist philosophy is how sensibilia or phenomena are in some way connected to the forms—i.e. how good things are connected to goodness or red things to redness.
There are two mechanisms by which form and phenomena connect. The first is emanation, in which the radiance of the One and the divine in some way are projected down to lower entities. The other is "participation", which describes how phenomena partake of one or more forms by means of a certain type of imitation. This is described in Ennead VI.4-5.