Kiddush () is a blessing said by Jews at the start of Shabbat and holiday meals.  The term is also used to refer to a light meal served in the synagogue after the long Shabbat and holiday morning prayers.  The word comes from a Hebrew root meaning "holy".

Kiddush at the evening Shabbat meal
There are two versions of the Ten Commandments in the Bible. These versions use different words.  The version in Exodus says "Remember Shabbat to keep it holy."  The version in Deuteronomy says "Guard Shabbat to keep it holy."  Jewish custom says that "remember" means to celebrate Shabbat.  "Guard" means resting—not working or doing business.

There are many things Jews do to celebrate Shabbat [see Shabbat (Celebrating Shabbat)].  The minimum way to celebrate is to say the blessing "Blessed are You, God, Who makes Shabbat holy."  The Talmud adds that the blessing should be said with a cup of wine. This is because wine makes people feel happy.  Because of this, the Friday evening meal in a Jewish home starts with a ceremony to say this blessing over a cup of wine.

Text
In traditional homes, the blessing is said in the Hebrew language.  This is a Simple English translation of the blessing. Words in italics like this are added to explain the Hebrew.

Kiddush at the morning (or noon) Shabbat meal
There is a different version of Kiddush for the Shabbat morning (or noon) meal.  This ceremony makes the meal feel more special.  

For the morning Kiddush, a person says verses from the Torah about Shabbat. These verses are usually from  and .  The person ends with the same blessing over the wine:

Kiddush at the third Shabbat meal
Most Jews do not say Kiddush at the third Shabbat meal.   However, Maimonides ruled that they should do so. The text for this Kiddush includes .  That verse is the source of the law to have three meals on Shabbat.

Kiddush in the synagogue
Kiddush is also said in the synagogue.  This does not replace saying Kiddush at home before the meal.
Evening Kiddush. In many synagogues, Kiddush is said at the end of Friday evening prayers.  This has been done since the Middle Ages.  At that time, people who were traveling often ate and slept at the synagogue on Shabbat.  Kiddush was said in the synagogue before they ate their Friday night Shabbat meal.  In modern times, Kiddush is still said in the synagogue Friday night.  This is done even if a meal is not served in the synagogue that night.  
Morning Kiddush. In almost all synagogues, a snack or light meal is served after Saturday morning prayers.  This meal is called "Kiddush", because it starts with the morning Kiddush.  There are two reasons for this snack or meal:
It is not allowed to eat before morning prayers,  but Shabbat morning prayers are long. People are hungry by the end of them.
People are not allowed to fast on Shabbat, even for a half-day.  This snack or meal helps people have some food before noon if prayers are long.

Kiddush on important Jewish holidays
Kiddush is said on these Jewish holidays:  
Passover (first and last days)
Shavuot
Sukkot (first day[s])
Shemini Atzeret/Simchat Torah
Rosh Hashanah
The holiday texts are different from the Shabbat texts. The blessings are said in the same way and at the same time of day as on Shabbat, but there are two differences:
On the first night(s) of Passover, Kiddush is not said in the synagogue.  Kiddush is said at home those nights over the first of four cups of wine at the Seder.
On the fast of Yom Kippur, Kiddush is not said, even on Shabbat. This is because eating and drinking are not allowed.  The law about "celebrating" Shabbat is satisfied by the evening prayers that night.

The Kiddush cup
Jews usually use a fancy cup for Kiddush.  The most common material for this cup is silver. Other materials are also used. These include ceramic, glass and wood.  The most important part of the custom is for the cup to be special and unusual in honor of the blessing.

References

Judaism