Sacraments are according to the Catholic Catechism, "efficacious signs of grace, instituted by Christ and entrusted to the Church, by which divine life is dispensed to us. The visible rites by which the sacraments are celebrated signify and make present the graces proper to each sacrament. They bear fruit in those who receive them with the required dispositions." (CCC, #1131)
In other words, sacraments are outward signs of an inner spiritual reality that not only symbolizes that reality, but also brings it about. In baptism, we see water, and oil, and fire which symbolizes and brings about our incorporation into the Body of Christ.
There are seven sacraments in the Church: baptism, confirmation, and Eucharist are the sacraments by which we are initiated into the Catholic community of faith. Penance and Anointing of the Sick are the two healing sacraments that continue the healing ministry of Jesus, while Marriage and Holy Orders are the two "vocation" sacraments.
To learn more about the sacraments, click here.