Some mitzvot are directed primarily towards women. Separating challah from dough is a beautiful example of such a mitzvah. The Torah tells us(Bamidbar 15:20) "From the first of your dough you shall set apart challah." Originally this portion of the dough went to the cohen. A possible reason this mitzvah is directed towards the woman is because the talmud calls Adam the "Challah of the world" (the portion of the world separated for serving Hashem.) Just as Hashem formed man from the dust of the earth, we separate challah from dough. Since Eve caused Adam to sin by giving him fruit from the tree of knowledge, this mitzvah may be coming to rectify that original sin.
If a woman makes dough from one of the five grains, (wheat, barley, spelt, oats or rye) and she uses more than 2.64 pounds, she must separate a small piece. The bracha however can only be said if she separates more than 4.95 pounds of flour, according to the Chazon Ish. Some opinions are more lenient as converting talmudic measures to modern day measurements, are not an exact science. Rabbi Chaim Naeh permits the blessing said over 3.66 pounds. Some sephardim who follow the Ben Ish Chai will only make a blessing when using 5.47 pounds! As always check with your LOR (local orthodox rabbi) to find your own custom.
This mitzvah brings great merit to the people who perform it. It is not uncommon for women to make separting challah "bracha parties" where they come together and separate the challah in unison and recite the blessing so all can respond. On a recent trip to Israel I was at the kever of the Rambam, my wife told me that about twenty women arrived early friday morning with their own dough, and each one separated the dough to the chorus of a loud 'amen' from all those in attendence! The talmud says "the one who answers amen to a bracha, receives more merit than the one who makes the bracha", this may be how this custom began.
You first make the blessing "Baruch Ata Adonoi Eloheinu Melech Haolam Asher K'dishanu B'mitzvotav V'tzivanu L'hafrish Challah. Then seprate a portion of about a k'zayit (a shot glass amount). You then burn the piece in the oven with aluminum foil, so the oven does not absorb the flavor of the challah.