There are three types of sealants manufacturers commonly use to assemble their engines. These are RTV or room temperature vulcanizing sealant, anaerobic sealant, and pipe joint compound. Of the three, pliable silicone sealants like RTV are most common when repairing or rebuilding an engine.
This is due to engine vibrations and imperfect surfaces on engine parts. RTV sealant is not to be used in areas with high temperatures like exhaust manifolds. Always use the appropriate sealer recommended by the engine manufacturer for the specific application.
RTV or room temperature vulcanizing sealant is used throughout the engine, sealing all kinds of leaks. If you've been a technician for any length of time, you've used RTV. An aerobic sealant dries in the presence of air, and forms a flexible rubber gasket. This sealant, along with the others mentioned, must be applied to a clean surface.
Scrape any old gasket off the surface with a gasket remover, and clean the surface thoroughly for a leak proof seal. Always follow manufacturer’s specifications and procedures when using any sealant around a sensor or actuator. This sealant may be used in place of a conventional gasket only in specific applications. Sometimes Teflon tape is a great option to help seal threaded parts.
These sealants should be kept out of bolt holes; they will fill the threaded hole and affect the bolts clamping force. Like the oil pan in the illustration, spread the sealant around the inside of the bolt holes, facing the fluid and the inside of the engine.