Answer: The writer to the Hebrews talks about the arrangement of the tabernacle of the Old Testament. The tabernacle was the portable sanctuary used by the Israelites from the time of their wandering in the wilderness after the Exodus from Egypt to the building of the temple in Jerusalem (see Exodus 25–27). Within the tabernacle was the ark of the covenant which included the mercy seat (Hebrews 9:3-5 NKJV).

The ark of the covenant, the chest containing the two stone tablets inscribed with the Ten Commandments, was the most sacred object of the tabernacle and later in the temple in Jerusalem, where it was placed in an inner area called the Holy of Holies. Also within the ark were the golden pot of manna, such as was provided by God in the wilderness wanderings (Exodus 16:4) and Aaron’s almond rod (Numbers 17:1-13). On top of the ark was a lid called the mercy seat on which rested the cloud or visible symbol of the divine presence. Here God was supposed to be seated, and from this place He was supposed to dispense mercy to man when the blood of the atonement was sprinkled there.

In a manner of speaking, the mercy seat concealed the people of God from the ever-condemning judgment of the Law. Each year on the Day of Atonement, the high priest entered the Holy of Holies and sprinkled the blood of animals sacrificed for the atonement of the sins of God's people. This blood was sprinkled on the mercy seat. The point conveyed by this imagery is that it is only through the offering of blood that the condemnation of the Law could be taken away and violations of God’s laws covered.

The Greek word for “mercy seat” in Hebrews 9:5 is hilasterion, which means “that which makes expiation” or “propitiation.” It carries the idea of the removal of sin. In Ezekiel 43:14, the brazen altar of sacrifice is also called hilasterion (the propitiatory or mercy seat) because of its association with the shedding of blood for sin.

What is the significance of this? In the New Testament, Christ Himself is designated as our “propitiation.” Paul explains this in his letter to the Romans: “Being justified freely by His grace through the redemption that is in Christ Jesus, whom God set forth as a propitiation by His blood, through faith, to demonstrate His righteousness, because in His forbearance God had passed over the sins that were previously committed” (Romans 3:24-25 NKJV). What Paul is teaching here is that Jesus is the covering for sin, as shown by these Old Testament prophetic images. By means of His death, and our response to Christ through our faith in Him, all our sins are covered. Also, whenever believers sin, we may turn to Christ who continues to be the propitiation or covering for our sins (1 John 2:1, 4:10). This ties together the Old and New Testament concepts regarding the covering of sin as exemplified by the mercy-seat of God.

Read more: http://www.gotquestions.org/mercy-seat.html#ixzz3BE4ivTpj