This can be called as heart of the .NET environment.
The .NET Framework provides a run-time environment called the common language runtime (CLR), which runs the code and provides services that make the development process easier.
This is a equal to JVM (Java Virtual Machine) in Java language.
.NET compilers convert the high level code into Microsoft Intermediate Language(MSIL). At runtime JIT(Just In Time) compiler converts the MSIL into native code specific to the OS(Operating System). CLR runs MSIL.
The runtime automatically handles object layout and manages references to objects, releasing them when they are no longer being used.