The action button is simply marker, which is mostly used in a seven-card stud high-low game. Basically, when a player wins a scoop pot above a certain size, the action button is awarded to this player. Now in the next pot, the player is then required to post an amount which will represent the completion of the bring-in amount for a full bet.
What this means is that, in a stud game with say a $4 and $6 betting limit, as well as a $1 bring-in, any player who has been awarded the action button, will have to post $2. Now after the cards are dealt, the player who has the low card, will now have to pay the $1 bring-in, and when the betting reaches the player who has won the action button and posted the $2 as well, the low card player will have to leave the $1 in, as a raise of the bring-in. The player does reserve the right to raise further if s/he wants to.
Apart from these two players, all the remaining players between the bring-in and the action button holder, can only call the bring-in, but they all know beforehand that they will be raised by the action button player. Similar to a kill button, the action button is also used as a marker where the players are required to place any extra forced bets.