The forms

PersonPossessive adjective
+ noun
Possessive pronoun
alone (no noun)
1st sgmy bookmine
2nd sgyour bookyours
3rd sg (m)his bookhis
3rd sg (f)her bookhers
3rd sg (thing)its colour(rarely used)
1st plour bookours
2nd plyour bookyours
3rd pltheir booktheirs

The difference

TypeRuleExamples
Possessive adjective Always before a noun. Describes who owns the noun. This is my car.
Is that your bag?
She loves her dog.
Possessive pronoun Stands alone — replaces adjective + noun together. This car is mine.
That bag is yours.
The dog is hers.
its vs. it's: its (no apostrophe) = possessive: "The cat licked its paw." · it's (with apostrophe) = it is / it has: "It's raining." This is one of the most common errors in English!

Exercises

Adjective or pronoun? Choose the correct form.

1. This is ___ house. (= our house)

2. That coat is ___. (= it belongs to her)

3. The dog wagged ___ tail.

4. Can I use ___ phone? (= your phone)