To embalm is to prepare a body for a funeral or burial. Part of a funeral director's job is to embalm the bodies of people who have died.
Various traditions of death and burial require a dead body to be preserved with chemicals, and when someone does this, she's said to embalm the body. Occasionally, there are also medical research or educational reasons to embalm a body. Embalm has an Old French root, embaumer, "preserve a corpse with spices."