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IAC stands for Idle Air Control. It's a valve that opens to let air bypass the throttle plate. The computer controls it to regulate idle speed. Like when you turn on your A/C it adds more load on the engine and the computer will open the IAC a little more to keep your idle RPM the same. And as you can probably guess by now it's located right by the throttle body..I think on the F150's it's on top of it
I always thought that stood for the "I Am Cool" valve. Which is also the gas pedal. This makes me very cool when I press this pedal all the way down and white smoke billows out from my rear tires and all the people look and say....."oooooohhhh, he's sooooo cooooool"