Chelation is the process of using an organic chemical (a chelator) that creates multiple bonds with free metal ions to remove those ions from solutions. Each chelator molecule incorporates a metal ion into a tightly-bound inner ring structure.
One important chelating agent used widely in industry, science and medicine is ethylenediamine tetraacetic acid (EDTA).
Chelating agents are sometimes used to treat people suffering from poisoning from metals such as lead, arsenic, chromium, and iron. They usually have to be delivered intravenously.
In industry and environmental remediation, chelating agents are widely used to treat water to remove or recycle metallic pollutants like lead and copper.
The chemical formed after the chelator binds with the metal ion is called a chelate. Many important biomolecules like enzymes are chelates. Chelates perform important functions in many biological processes, such as photosynthesis and cellular oxygen transport.
Part of the information in this writeup was found at http://scifun.chem.wisc.edu/CHEMWEEK/chelates/chelates.html and http://www.room103.com/archive/q_chelation.htm. The rest is based on work I did for the science dictionary at http://biotech.icmb.utexas.edu/