In the federal system, supervised release (sometimes also called special or mandatory parole) is a preliminary period of freedom for recently released prisoners. It's imposed at the time of sentencing, and is for the prisoner to serve after completing his or her prison sentence.
During federal supervised release, a probation officer supervises the convict. A former prisoner who violates the conditions of supervised release may be sent back to prison, potentially to remain there until the end of the supervised release term.
Supervised release differs from both probation and parole, though the three share some similarities and are often confused.
Probation, like the other concepts, is a form of conditional freedom. Judges may impose it in lieu of time behind bars.
Parole is, in general, a form of early release from prison after inmates have served a portion of their prison sentences. Considering in part behavior while behind bars, parole boards determine whether to grant parole. The federal government uses supervised release in lieu of parole.
Supervised release in the federal system isn't a privilege granted after a defendant's incarceration. And it doesn't take the place of prison time. Rather, it's a period of oversight that a judge imposes, but that the defendant doesn't serve until after prison.