People of the Book (Ahl al-Kitab) is the Quran's name for Jews and Christians, who received earlier revealed scriptures. Islam gives them a special respect and a special place among the followers of other religions.
The fuller answer
A Muslim may eat the food of the People of the Book and may marry their chaste women. The Quran says that those who believe, whether Jews, Christians or Sabians, and do good have their reward with their Lord. It says Muslims should argue with them only in the best way, and it commands justice and kindness to those who do not fight Muslims.
The Quran also disagrees with them on some beliefs, such as the divinity of Jesus, and says clearly where it differs. Muslims believe a believer can disagree strongly and still be kind. The Prophet ﷺ lived beside Jews and Christians in Medina, made a treaty with them and said that whoever harms a person under Muslim protection will have him as an opponent on the Day of Judgment.
This day [all] good foods have been made lawful, and the food of those who were given the Scripture is lawful for you and your food is lawful for them. And [lawful in marriage are] chaste women from among the believers and chaste women from among those who were given the Scripture before you, when you have given them their due compensation, desiring chastity, not unlawful sexual intercourse or taking [secret] lovers. And whoever denies the faith - his work has become worthless, and he, in the Hereafter, will be among the losers.
Indeed, those who believed and those who were Jews or Christians or Sabeans [before Prophet Muhammad] - those [among them] who believed in Allah and the Last Day and did righteousness - will have their reward with their Lord, and no fear will there be concerning them, nor will they grieve.
And do not argue with the People of the Scripture except in a way that is best, except for those who commit injustice among them, and say, "We believe in that which has been revealed to us and revealed to you. And our God and your God is one; and we are Muslims [in submission] to Him."
Allah does not forbid you from those who do not fight you because of religion and do not expel you from your homes - from being righteous toward them and acting justly toward them. Indeed, Allah loves those who act justly.
This answer follows the mainstream Sunni understanding and is general learning, not a fatwa. Where Muslims differ, the answer says so. Have a question of your own? Write to us.