To understand recursion, you need to understand the storage model. Though there are several variations, basically "automatic" storage, the storage used to contain automatic variables, parameters, compiler temps, and call/return information, is arranged as a "stack". This is a storage structure starting at some location in process storage and "growing" either "up" (increasing addresses) or "down" (decreasing addresses) as procedures are called.
One might start out with a couple of variables:
00 -- Variable A -- 27 01 -- Variable B -- 45
Then we decide to call procedure X, so we generate a parameter of A+B:
02 -- Parameter -- 72
We need to save the location where we want control to return. Say instruction 104 is the call, so we'll make 105 the return address:
03 -- Return address -- 105
We also need to save the size of the above "stack frame" -- four words, 5 with the frame size itself:
04 -- Frame size -- 5
Now we begin executing in X. It needs a variable C:
05 -- Variable C -- 123
And it needs to reference the parameter. But how does it do that? Well, on entry a stack pointer was set to point at the "bottom" of X's "stack frame". We could make the "bottom" be any of several places, but let's make it the first variable in X's frame.
05 -- Variable C -- 123 <=== (Stack frame pointer = 5)
But we still need to reference the parameter. We know that "below" our frame (where the stack frame pointer is pointing) are (in decreasing address order) the frame size, return address, and then our parameter. So if we subtract 3 (for those 3 values) from 5 we get 2, which is the location of the parameter.
Note that at this point we don't really care if our frame pointer is 5 or 55555 -- we just subtract to reference parameters, add to reference our local variables. If we want to make a call we "stack" parameters, return address, and frame size, as we did with the first call. We could make call after call after call and just continue "pushing" stack frames.
To return we, load the frame size and the return address into registers. Subtract frame size from the stack frame pointer and put the return address into the instruction counter and we're back in the calling procedure.
Now this is an over-simplification, and there are numerous different ways to handle the stack frame pointer, parameter passing, and keeping track of frame size. But the basics apply regardless.