According to the Catechism of the Catholic Church, 'The sacraments are efficacious signs of grace, instituted by Christ and entrusted to the Church, by which divine life is dispensed to us' (#1131).
This is a complex definition, so let's break it down.
The word efficacious means 'effective.' This means that according to Catholic teachings, sacraments do what they say they do. Because of God's power, they simply work, Catholics believe.
A sign is an object, word, or gesture that points to something beyond itself. According to Catholic teaching, sacraments use all kinds of human objects, words, and gestures, but all of these point beyond themselves to something greater, to God and His grace.
Catholics define grace as God's free gift of His presence, His help, and His salvation.
Catholics believe, then, that sacraments point to and are channels of God's grace. They work as an effective means of communication between God and His people.
Let's continue. According to Catholic doctrine:
The sacraments are instituted by Christ. Christ instituted all seven sacraments as ways in which He could be present to His people even after His Ascension into Heaven.
The sacraments are also entrusted to the Church. Christ gave the sacraments to the Church so that the Church could dispense them to the faithful.
The sacraments dispense divine life. People who receive the sacraments actually share in the divine life of God. His presence enters into their souls, He helps them to live the Christian life, and He saves them so that they may reach eternal life.
According to the Catholic faith, the sacraments are a gift from God, given through the Church as an outpouring of His love. Through the sacraments, God justifies and sanctifies His people (i.e., He saves them and makes them holy), He meets His people where they are in order to draw them up to Him, He pours out His grace, He builds up the Church and He receives worship.