Wikipedia:

ATP Challenger Series

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The ATP Challenger Series is a series of international men's professional tennis tournaments that allow players to win enough ranking points to earn an entry into an ATP-level main draw or qualifying draw. They are fully administered by the ATP Tour.

Prize Money and Ranking Points

Challenger tournaments offer total prize money ranging from $25,000 up to $150,000, which, along with whether the tournament provides "hospitality" (food, lodging) to the players, determines the number of points a player gets for winning each match in the tournament.

"Hospitality" bumps the points distribution up one level, and the points to the overall winner range from 50 points for a $25K tournament to 100 points for $150K with Hospitality.

In contrast, ATP-level tournaments offer total prize money from $400K to over $6 Million and points to the overall winners from 175 to 1000.

As a point of reference, player rankings are based on points accumulated in the previous 52 weeks, and in any given week of rankings, a player who has earned 400 points in Singles play the past 52 weeks will be ranked about 100th. 200 points will get him a ranking near 200th, 100 points will get him to about 350th, and 50 points will put him around 500th. So the rankings points earned in Challenger tournaments can get a player moving up the rankings quickly.

Player Quality

Players have usually had success at the futures levels of the ATP tour before competing in Challengers. Due to the lower level of points and money available at the Challenger level, most players in a Challenger have a world ranking of 100 to 500 for a $25K tournament and 50 to 250 for a $150K tournament.

One exception to this is during the 2nd week of a Grand Slam-level tournament, when top-100 players who have already lost in the Slam will take a Wildcard entry into a Challenger tournament beginning that 2nd week.

Another exception is for a tournament to which a particular player has a sentimental attachment, such as in his hometown.

Andre Agassi

Arguably the most notable Challenger appearance came in late 1997 in Las Vegas, when Andre Agassi, whose world ranking had dropped to 141 at age 27, played his hometown Las Vegas challenger, losing in the final, to begin his steady climb up the rankings to his first time ever at #1, 18 months later.

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