A phoneme is the smallest unit in the sound system of a language. It is an abstract concept — a category in the mind of a speaker of a language that is defined by conceptual understanding rather than by physical hearing or physical articulation. A phoneme is represented in speech by the smallest speech segment in a word that is distinctive for meaning. Each phoneme in English is a collection of related speech segments which speakers of our language recognize as making “the same” contribution to meaning in a given context. Phonemes are represented inside of slash brackets / /. The various physical realizations of any given phoneme are known as allophones of the phoneme.
For more detail on phonemes, read Terminology: Phonemes and Phonology.