​Nepeta cataria is an herb similar to spearmint.  It contains an oil which acts on a cat's olfactory senses and produces a pleasurable effect.  It is not harmful, but cats can vary in their responses to it.  Some cats become overly affectionate and playful while others may get a bit aggressive.
 
Surprisingly, the attraction for catnip is a genetic trait, and about 50% of cats will have no interest or effect from catnip.  Most cats do not have any response until they are 3-6 months old, so if your kitten has better things to do when you present him with this treat, try again in a few months.  It can be used as a reward such as at scratching posts to encourage appropriate behaviors!