There is a blue bird.
That apple hasn't ripened enough yet, has it?
Wow, this blue paint smells exactly like the red paint.
This is a single kanji with an い on the end, meaning you know it's probably an adjective. What's the adjective form of blue? It's still blue!
Since this word consists of a kanji with hiragana attached, you can bet that it will use the kun'yomi reading. You didn't learn that reading with this kanji, so here's a mnemonic to help you:
You have to remember the あお portion to read this word. Think of blue things on your body. Those are bruises. Touch them. What would you say? OW! (あお).