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The "Ring of Fire" is an arc stretching from New Zealand, around Asia, Alaska, and south along the coast of North and South America. Most of the world's active and dormant volcanoes are in this area.
This huge ring of volcanic and seismic (earthquake) activity is located at the borders of the Pacific Plate and other tectonic plates.
Plates are like giant rafts of the earth's surface which often slide next to, collide with, and are forced underneath other plates. Around the Ring of Fire, the Pacific Plate is colliding with and sliding underneath other plates. There is a tremendous amount of energy created by these plates and they easily melt rock into magma, which rises to the surface as lava and forms volcanoes.