Perlite is a silaceous volcanic rock which expands when heated to above 871C (1600F). Crude perlite contains 2-6% water, and when heat is applied it causes the water to vaporize and create teensy little bubbles in the rock. The benefits of expanded perlite are that it can weigh as little as 2lbs/ft3, doesn't rot, has a pH close to neutral, resists heat and fire, and is sterile.
Perlite is widely used in horticulture as a rooting medium for seedlings and cuttings. It is an essential ingredient in potting soil because it allows good drainage and prevents compaction. It also has many industrial uses, including as an added abrasive for soaps, as a filler for plastics, and as a filter media for water purification. The constuction industry uses it for insulation, either as loose filling or mixed in with concrete, cement, or plaster. Plaster and concrete are also mixed with perlite in simulated stone and brick products.