It commonly represents the close back rounded vowel /u/, somewhat like the pronunciation of ⟨oo⟩ in "boot" or "rule".
Historically, Cyrillic U evolved as a specifically East Slavic short form of the digraph ⟨оу⟩ used in ancient Slavic texts to represent /u/.
The digraph was itself a direct loan from the Greek alphabet, where the combination ⟨ου⟩ (omicron-upsilon) was also used to represent /u/.
(The letter Izhitsa was removed from the Russian alphabet in the orthography reform of 1917/19.)
In Tuvan the Cyrillic letter can be written as a double vowel.