Very popular drink served cold in bottles or hot by the mug ("foaming tankards of hot butterbeer") at the Three Broomsticks. House-elves can get drunk on butterbeer, but it doesn't have that effect on humans (GF21).
How is butterbeer made and what does it taste like? When asked about this by "Bon Appetit" magazine, JKR responded: "I made it up. I imagine it to taste a little bit like less-sickly butterscotch."