Software Libre Foundation
The GNU/Linux operating system is the operating system that is more commonly referred to as Linux. The "Linux" in GNU/Linux is the kernel of the operating system. The GNU part comprises the user tools and general other software due to which GNU/Linux can claim itself to be a complete operating system as defined in the Open Group's POSIX standard.
To make an analogy; The Linux kernel would be the engine of a car ie. the central part that drives everything else, the GNU part would provide everything that makes an engine usable to get from A to B.
Linux was concieved around 1991 by a young finnish programmer, Linus Torvalds. Studying at the university of Helsinki at the time, he found the operating system he was using unsatisfying for real world usage. That operating system was ofcourse Minix, an operating system written by professor Tanenbaum, mainly to be used as an educational tool for classes in operating system design.
After some months of working feverishly, linux was presented to its future in the comp.os.minix newsgroup. It wasn't long before other programmers started to adopt and improve it. Every release has seen a significant improvement of features and market-share.
Although linux was originally published under a license that prevented commercial usage, this license was changed to the GPL.