The Latin word sacramentum means "a sign of the sacred." There are seven sacraments in the Church: Baptism, Confirmation or Chrismation, Eucharist, Penance, Anointing of the Sick, Holy Orders, and Matrimony. They are the heart of the life of the Catholic Church. When we participate in them worthily, each sacrament provides us with graces—with the life of God in our soul.
The seven sacraments are ceremonies that point to what is sacred, significant and important for us. They are special occasions for experiencing God's saving presence. That's what theologians mean when they say that sacraments are at the same time signs and instruments of God's grace.