Shift-Command-3 will do the trick. In System 7, you'll hear the sound of a clicking camera to let you know your keystroke was successful.
The screenshot will be a PICT file named "Picture x", where x = any number 1 or greater depending on how many pictures are already in the root directory of the startup disk. This directory is also where your file will wind up.
Any program capable of opening PICT files should read them, but the default program is TeachText (SimpleText if you have a later version of System 7). Note you will need the System 7 version of TeachText to open them; older versions (1.2 and earlier) do not support the opening of PICT files. Beware of multiple copies of TeachText on a drive (easy to do if installing software since many programs came with a copy of it).
In System 6, a screen shot can also be taken with the keystroke, although there is no camera sound, the file will be a MacPaint document, and the name will be "Screen x", where x = any number 0 or greater depending on how many pictures are already in the root directory of the startup disk. Again, the file will be placed in said directory.
Historical note: Some early publications and longtime users may refer to a screen shot as a "screen dump". This term was most widely used in the 1980s.