A sacrament is a rite or ceremony instituted by Jesus, and observed by the church as a means of or visible sign of grace. The English word sacrament is from the Latin sacramentum, which means to make holy, or to consecrate.
Sacraments are ceremonial in nature, which separates them from other things that Jesus instructed believers to do (e.g. "go and make disciples of all nations," Matthew 28:18).
The numeration, naming, understanding, and the adoption of the sacraments vary according to denomination. Most Protestant denominations recognize at least two: baptism and the Lord's Supper. However, Roman Catholics and some Protestant denominations
list seven sacraments:
- Eucharist (or Communion)
- Holy Orders (Ordination)
- Penance, Confession, and/or Reconciliation
- Anointing of the Sick (or Extreme Unction, Last Rites)
Other names are used by other Christian bodies for the sacraments which they recognize, notably Chrismation is the name for the reception of the seal of the Holy Spirit in the Eastern Orthodox Church.
Historical Recognition of the Sacraments
The identification of sacraments as "signs" can be traced back to St. Augustine who said: "the signs of divine things are, it is true, things visible, but ... invisible things themselves are also honored in them."
De Cat. Rud. 26.50)
The Council of Trent in the Tridentine Creed interpreted this as follows in mid sixteenth century: "A Sacrament is a visible sign of an invisible grace"
Christians have differed widely as to the meaning of the sacraments and how God works through them. Catholics, and many Protestants, consider them means of grace through which God bestows spiritual
blessing. This view was held by Martin Luther and John Calvin. Other Protestants, following Huldreich Zwingli, view the sacraments as signs of Christian profession
and testimony to grace that has already been given through faith.
Most Protestants consider only the "evangelical" sacraments of Baptism and Communion to be sacraments per se, understanding these to be the only such practices directly instituted by Jesus, as reported in the Gospels. They hold that
the other five rites are not made sacraments by the New Testament. So while Protestant churches have marriage ceremonies, and many have ordained clergy and a ceremony conferring ordination, they consider these rites to be ordinances rather
Some Anabaptist and Brethren groups consider foot-washing to be a sacrament. "Some Protestant groups, notably the Quakers and the Salvation Army, do not use sacraments." 
The foundational Thirty-Nine Articles of Anglicans and Episcopalians recognize only the two primary sacraments:
"There are two Sacraments ordained of Christ our Lord in the Gospel, that is to say, Baptism, and the Supper of the Lord. Those five commonly called Sacraments, that is to say, Confirmation, Penance, Orders, Matrimony, and extreme Unction, are not
to be counted for Sacraments of the Gospel, being such as have grown partly of the corrupt following of the Apostles, partly are states of life allowed in the Scriptures; but yet have not like nature of Sacraments with Baptism, and the Lord's Supper,
for that they have not any visible sign or ceremony ordained of God." Article XXV Anglicans, like Catholics, base their definition of sacrament on St. Augustine in their Catechism. As stated in the 1979 Episcopal Book of Common Prayer:
"The sacraments are outward and visible signs of inward and spiritual grace, given by Christ as sure and certain means by which we receive that grace." (See  under the Catechism, p. 857) The
Anglican Catechism follows Article XXV in distinguishing between the two major sacraments (Baptism and the Eucharist), the "sacraments of the Gospel" and the "other sacramental rites which evolved in the
Church" but is less dismissive of those extra five:
"Although they are means of grace, they are not necessary for all persons in the same way that Baptism and the Eucharist are." (ibid. p. 860)
Catholics and Orthodox
The seven sacraments accepted by Roman Catholicism are generally also accepted by Eastern Orthodoxy and Oriental Orthodoxy, as well, but the latter traditions do not limit the number of sacraments to seven, holding that anything the Church does as Church
is in some sense sacramental. To be more accurate, for the Eastern Orthodox and Oriental Orthodox Christian the term “Sacrament” is a Westernism that seeks to classify something that may be impossible to classify.
The Roman Catholic Church traces the canonical use of seven sacraments to the mid-twelfth century, which were formally decided at the Council of Trent (1545) in response to Protestant innovations.