Segwit is an upgrade to Bitcoin that makes more room in the block for transactions and fixes transaction malleability. It has been tested on testnet for a year or longer and is the best way to scale bitcoin.

It moves the transaction signature data to a different part of the block, allowing more room in the block for transaction only data. It also gives weight to different block data, allowing signatures a certain weight instead of kB(for example), and allowing the rest of the weight to go to transactions. This is how it effectively turns a 1mb block into a 2.7mb block without a block size increase.