The Lasso tool allows a selection to be made by drawing a freeform outline. This tool is useful for selecting with gesture-like motions, and to follow contours.
Like the Brush, the Lasso can be used in a segmented mode by holding down Alt/Option. While using the modifier key, clicking will designate an endpoint for a new segment; releasing the modifier key will complete the selection. This is similar to the function of the Polygonal Lasso.
- Lasso tool at the Photoshop Wiki