The pure, simple, unadorned word challah means “a loaf of bread.” However, in halachic terms the word challah has a very specific definition, and colloquially it came to mean a certain type of bread thousands of years later.

The halachic definition of challah is a reference to Positive Mitzvah #133. It entails separating a section of dough from your kneading and giving it to a kohen. This piece of dough is called “challah.” Any dough which is made of wheat, barley, spelt, oat or rye is obligated in this mitzvah. The kohen and his family would eat the challah while in a state of ritual purity. The rabbis decided that a home baker should give 1/24th of the dough to the kohen, while a commercial baker has to donate 1/48th of his dough.

Biblically speaking, the mitzvah of challah is observed only in the Land of Israel. Furthermore, according to most halachic authorities, the mitzvah of challah was a requirement only in the times of the Temple. Today, no Temple, no challah. But the rabbis reinstituted the practice of challah—even outside the Land of Israel—to commemorate this special mitzvah. However, since today we are all considered ritually impure, the kohen cannot eat the challah. Instead, Jewish women through the centuries knead homemade dough, and then separate a piece of the dough and burn it. All kosher bakeries do the same—they separate a piece of dough from each batch, and throw it on the floor of the oven. Today only a small piece of dough is separated for challah: since it isn’t eaten, it would be wasteful to separate 1/24th or 1/48th of the dough.

Before separating the challah, the following blessing is recited:

Baruch attah Ado-noy Elo-hei-nu melech ha-olam asher kid-e-sha-nu b’mitz-vo-tav v’tzi-vanu le-haf-rish challah.
[Blessed are You, L‑rd our G‑d, King of the universe, who has sanctified us with His commandments and commanded us to separate challah.]

Eventually, the soft, sweet bread loaves customarily eaten by the Shabbat meals became known as challah (not “hally,” as is the popular mispronunciation).