The Sacrament of Holy Orders is the continuation of Christ's priesthood, which He bestowed upon His Apostles; thus, the Catechism of the Catholic Church refers to the Sacrament of Holy Orders as "the sacrament of apostolic ministry."  "Ordination" comes from the Latin word ordinatio, which means to incorporate someone into an order.  There is only one Sacrament of Holy Orders, but there are three levels in which one is ordained into the priesthood of Christ:  the diaconate,
the priesthood, and the episcopate (bishops).

As the Catechism of the Catholic Church notes:  “The essential rite of the Sacrament of Holy Orders for all three degrees consists in the bishop's imposition of hands on the head of the ordinand and in the bishop's specific consecratory prayer asking God for the outpouring of the Holy Spirit and His gifts proper to the ministry to which the candidate is being ordained.”

The priesthood was established by God among the Israelites during their exodus from Egypt.  God chose the tribe of Levi as priests for the nation.  Their primary duties were the offering of sacrifice and prayer for the people.  Christ, in offering Himself up for the sins of all mankind, fulfilled the duties of the Old Testament priesthood once and for all.  But just as the Eucharist makes that sacrifice present to us today, so the New Testament priesthood is a sharing in the eternal priesthood of Christ. While all believers are, in some sense, priests, some are set aside to serve the Church as Christ Himself did.

The first level of the Sacrament of Holy Orders is the diaconate.  Deacons assist priests and bishops. As ministers of Word, deacons proclaim the Gospel, preach, and teach in the name of the Church.  As ministers of Sacrament, deacons baptize, lead the faithful in prayer, witness marriages, and conduct wake and funeral services.  As ministers of Charity, deacons are leaders in identifying the needs of others, then marshaling the Church's resources to meet those needs. Deacons are also dedicated to eliminating the injustices or inequities that cause such needs. Married men are allowed to become permanent deacons; once a married man has accepted ordination, however, he cannot remarry if his wife dies. 

The second level of the Sacrament of Holy Orders is the priesthood.  No bishop can minister to all of the faithful in his diocese, so priests act as "coworkers" of the bishops.  The basic ministry of a diocesan priest is to proclaim God's presence in every phase of people's lives.  The chief duties of the priesthood are the preaching of the Gospel and administering the sacraments of the Holy Eucharist, Reconciliation, Baptism, Marriage, and Anointing of the Sick.  Besides setting time aside each day for prayer, priests offer spiritual guidance and participate in a full range of parish and community activities

The third level of the Sacrament is that which Christ Himself bestowed upon His Apostles:  the episcopate.  A bishop is a man who is ordained to the episcopate by another bishop (in practice, by several bishops).  He stands in a direct, unbroken line from the Apostles, a condition known as "apostolic succession."  Ordination as a bishop confers the grace to sanctify others, as well as the authority to teach the faithful and to bind their consciences.  Because of the grave nature of this
responsibility, all episcopal ordinations must be approved by the Pope.