A bain marie (ban mah-REE) is the fancy term for a hot water bath. It's used for cooking delicate foods like custards and terrines to create a gentle and uniform heat around the food. Here's how!
Find a baking dish with high sides that will hold all your individual custards (or other dish being baked). We usually use a roasting pan or casserole dish. A broiler pan could work in a pinch, but avoid a dutch oven - the sides of a dutch ovens hold too much heat for this kind of cooking and could over-cook your food.
Line this dish with a clean kitchen towel. This keeps the ramekins from slipping once you pour in the water. Fill the ramekins with whatever you're baking and nestle them inside the baking dish.
Bring a large pot of water to boil and then pour the water into the larger baking dish and around the ramekins. Avoid splashing water into your nicely filled custards! The water should come about halfway up the sides of the ramekins. If you don't have quite enough water, you can just add hot tap water instead of boiling another batch.
We find it easiest to do this last step with the dish in the oven already. By pulling out the oven rack and filling the dish with water right there, we avoid the danger of splashing hot water into the custards (or on ourselves!) when transferring the dish to the oven.
Check the bain marie frequently while your dish is cooking. The water should be at a barely discernible simmer. If the water is boiling, the oven is too hot and you should reduce the oven temperature. If the water evaporates before the custards are done cooking, add more hot tap water.
The water will create a barrier between the food and the direct heat of the oven, helping the custard cook slowly and evenly. This is the key to getting a creamy custard without rubbery edges or a dry surface!
Related: Good Idea! Use Canning Jars Instead of Ramekins!