[f., pl. “challot”]; has two meanings: one is the “bread” used on Shabbat; the second is that part of dough that is removed from the batch and burnt in the oven. It is burnt because there is a technical obligation to give it to a “Kohen,” a Priest; but without the Temple, this custom was suspended, and the dough has had to be destroyed.
“Challah” on Shabbat is used in the following manner: two loaves are set out on the table, and covered with a cloth; a napkin is sufficient, but attractive Shabbat challah covers are available in Judaica stores. After Kiddush is recited on a cup of wine, the people present wash their hands ritually, reciting a blessing on that act; then return to the table, where the head-of-the-household recites a blessing praising G-d Who “brings forth bread from the ground.” The “challah” is cut, and distributed to all present, and the meal then continues.
The origin of the use of “challah” is the miraculous “Mohn,” the “bread from heaven” which fell for the Jewish People while they were in the desert, on their way to the Land of Israel. To implant the idea of Shabbat, two portions fell on Friday, none of it spoiled when left overnight, and none fell on Shabbat, to mark it as a special time.