Literal meaning: Add oil/add gas!
The more figurative meaning of 加油 is “Go!” or “Keep at it!” or “Hang in there!” or “Do your best!” You often hear it at sporting events (you may have caught the phrase during the 2008 Beijing Olympics), when thousands of people might chant “Jiayou!” to cheer on their favorite team or athlete, but 加油 has tons of other uses. Teachers might say 加油 to their students before a test to encourage them to do well, my co-fellows and I frequently say 加油 to each other before a long day of classes, or you might say 加油 to a sick friend to help hir feel better and send your good wishes. In a more serious/poignant context, the phrase “Jiayou Sichuan”/”Jiayou Wenchuan” became popular in the aftermath of the devastating earthquake in Sichuan Province in 2008, as a way to encourage the people of Sichuan to be strong in the face of adversity. Three years later, a viral video featured denizens of Sichuan saying “jiayou” to the people of Japan in the aftermath of the 2011 Tohoku earthquake and tsunami (nothing to sneeze at, considering the frosty-at-best relations between China and Japan). As you can see, 加油 has lots of practical applications, and if you come to China, you’re bound to hear it, or even use it.
Of course, 加油 can also be rather mundane. When you’re driving along the many highways that cris-cross China, you’re likely to stop at a 加油站, or gas station. Only in Chinese can a gas station also be a message of encouragement.