A cube shaped stone structure approximately 45 feet long, wide, and high, located in the Great Mosque (al-Haram) in the city of Mecca. The building has but one door, no windows and besides some pillars and lanterns and such, is empty. While this is the point to which all Muslims pray, it should be noted that they do not worship the Caaba, worship being reserved solely for Allah.
Traditionally the Caaba was ordained by Allah to be built by Adam in the shape of a house in Heaven named Baitul Ma’amoor. Later (again, as tradition has it) Abraham and Ishmael rebuilt a similiar structure on the remaining foundations.
It's been through some rough times since then and has been reconstructed anywhere from five to twelve times. The structure is usually clad in a black silk cloth covering.
The corners of the cube point roughly face the four points of the compass and the black stone, another Muslim relic of some importance, is positioned in the Eastern corner. A few meters away from the Caaba, also on the Eastern side is a well that provides thirsty Muslims with Zamzam water which Irfan has provided an excellent write-up for.
In the days of Muhammad it housed a number (probably several hundred although the exact number is not known) of pagan deities worshipped by the surrounding tribes and did so until Muhammad returned to Mecca around the year 630 and cleansed the Caaba of all idols.