Ghee is butter that's been melted and allowed to separate, leaving just the clear butterfat. If you've ever dined on Indian food, you've probably eaten ghee.
When butter is clarified, it's simmered until any water evaporates and all the extra solid particles of milk sink to the bottom or float on top. Once these are skimmed off, what's left behind is ghee. In South Asian cuisines, ghee is a common fat used in many dishes. It also holds an important place in some Hindu rituals, as cows, and products made from their milk, are considered sacred.