a vernacular interjection-type phrase. "Are we cool?" Posed as a question it means "do you understand," or "do you have any disagreement or argument with me, or with (an issue)?" Used declaratively, it confirms: "I understand and have no disagreement." It can also mean "things are going well/conditions are favorable" or "we are on good terms" from Urbandictionary.com: When in doubt as to whether or not someone is able to get over themselves and whatever disagreement they may have had in the past with another, the question is often posed. Hey, dude, we cool? Yeah, man. we cool.