The lever at the top of the fireplace operates the "damper". The damper is a door that opens the fireplace to the outside via the chimney.
The damper must remain open whenever a fire is burning in the fireplace to allow smoke to escape out the chimney instead of filling the fireplace and eventually, the room. The damper should be opened prior to starting a fire, otherwise the handle will be too hot to handle. Once the fire has gone completely out, the damper should be closed to prevent heat from being drawn out of the room / home. You can easily check is your damper is open or closed by simply looking up the chimney. If dark, it is closed. If light(er) it is open. Do not operate the damper while looking up - as dirt, soot, rust, etc. can fall when doing so.
The damper also prevents pests from enter the room / home. It is not uncommon for birds, bats squirrels, etc. from creating a home / getting caught in side the chimney.
I hope this helps - good luck!
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