it shoots 5.56 and .223 bullets. They are the same size, just different ways of measuring. The AR-15 is the same thing as a military M16 except the military version has a 3rd burst and the AR is strictly semi-auto.
What sucks about it is that .223 ammo gets very expensive very quickly. If you plan on using it for home defense, look for another gun. Not only will the .223 go through the robber but also your walls and into your neighbor's home. It is a great target gun. Not as reliable as an AK-47 but much more accurate.

If you are just getting into guns, I would recommend a .22 or a 9mm. Bullets are much cheaper and more rounds=more fun.