Laylat Al-Qadr, or the Night of Power, occurs on the night of one of the odd days during the last ten days of Ramadan. It is widely believed to fall on the 27th day of Ramadan. This night is commemorated as the night Prophet Muhammad received the first revelation of the Quran. The Quran calls this night "better than a thousand months." Muslims spend the entire night in prayer, devotion, and recitation of the Quran.

From the Quran:
In the Name of Allah, Most Gracious, Most Merciful

Surah Al-Qadr (The Night of Decree), Quran
We have indeed revealed this (Message) in the Night of Power
And what will explain to thee what the night of power is?
The Night of Power is better than a thousand months.
Therein come down the angels and the Spirit by Allah's permission, on every errand;
Peace!...This until the rise of morn!

Excerpt from Surah Ad-Dukhan (The Smoke), Quran
We sent it down during a Blessed Night: for We (ever) wish to warn (against Evil).
In the (Night) is made distinct every affair of wisdom,
By command, from Our Presence. For We (ever) send (revelations),
As Mercy from thy Lord: for He hears and knows (all things);(3-6)


From Hadith:

Aisha said that she asked the Prophet Muhammad:
"O Messenger of Allah, if I come to locate the Blessed night then how should I pray in this night?" The Prophet Muhammad said: "Say: Allah You are Most Forgiving and love forgiveness, then do forgive me."(Tirmithi)

Aisha related that the Prophet Muhammad said:
"Look for the Night of Power on an odd-numbered night during the last ten nights of Ramadan."(Bukhari)

The Prophet Muhammad said:
"Whoever prays during the night of Qadr with faith and hoping for its reward will have all of his previous sins forgiven." (Bukhari and Muslim recorded from Abu Huraira).