CSS 3 is the latest iteration of Cascading Style Sheets. It is divided into modules that add new selectors, properties, and values for styling elements. Some key additions in CSS 3 include new selectors like attribute and structural selectors, font features like @font-face, color properties like rgba and hsla, background properties like gradients and multiple backgrounds, border properties, box model properties, and animation features. The specification is still in development and support varies across browsers.