KVM (Kernel-based Virtual Machine) is a virtualization solution running on x86-based Linux servers with hardware assisted virtualization.
KVM allows you to create and run multiple virtual machines on your Linux server, all potentially running different operating systems (don't even have to be Linux) and kernels.
Most of operations are accomplished using virt-* commands or operating within the specialized virtualization shell: virsh. For GUI users, there's a great Python-based software package called virt-manager.