Fuse stands for Filesystem in Userspace. It can be used to create filesystem backends without writing all the code as a kernel module.
FUSE is a library and a kernel module which allows creating filesystems using only userspace code. It has an API in C and many existing wrappers in other languages. Originally written for Linux >= 2.4 and located behind the VFS layer, now it is usable on many other systems. Since Linux 2.6.14 it's included in the mainline kernel.
Questions about using FUSE API, fuse tools and debugging filesystems using FUSE should be have this tag.
For the latest API, refer to the documentation.