Linux ('Linus Unix', unofficial recursive backronym: Linux Is Not Unix) is a Unix-like kernel, which is more similar to the Unix System V family instead of the BSD family of Unixes. It's development was started in 1991 by Linus Torvalds, who was inspired by the Tanenbaum's MINIX operating system.
Nowadays, Linux has seen popular use in server environments as a replacement for expensive and (often) outdated Unix operating systems. However, desktop market share is low, but steadlily increasing.
Linux is known to run on the world's fastest supercomputers.
An additional note: Linux is just the OS kernel, while the GNU tools make it usable, the combination being called GNU/Linux.