Compost tea is made by soaking compost in water and then draining off the water. This tea is used as a organic fertilizer on any plant in the yard or garden. It's easy to make, and works wonders on outdoor plants.
Compost is the first ingredient necessary for compost tea. Most organic gardeners know how to make compost, but I'll give a quick rundown here. There are two kinds of compost. The first is made by putting organic material in a large enough pile, and in the right combinations that an exothermic reaction takes place, and the pile heats up. This hastens the breakdown of the organic material. This is also a work intensive method of composting as the pile must be stirred every few days. The second method is to just dump organic material in a large pile and leave it for a year. After the year is over, the pile will have turned into a pile of nice, soft dirt with a high organic content. Earthworms will usually be plentiful in a compost pile of this type. Only plant material should be put into a compost pile. Animal products tend to rot and spoil rather than degrade into soil.
To make the tea, you just put a shovel full of compost into a container. I use a 5 gallon bucket with a lid, or a garbage can. If you want to be really organic and mother earth newsy, you could use a wooden barrel I guess. Cover the compost with water and let it sit a day or two. The discolored (and wonderfully odiferous sometimes!) water can then put put directly around (not on) your plants. I recommend using this outside only due to the smell.