French personal pronouns (analogous to English I, we, you, and so on) reflect the person and number of their referent, and in the case of the third person, its gender as well (much like the English distinction between him and her, except that French draws this distinction among inanimate nouns as well). They also reflect the role they play in their clause: subject, direct object, indirect object, or other.
Personal pronouns display a number of grammatical particularities and complications not found in their English counterparts: some of them can only be used in certain circumstances; some of them change form depending on surrounding words; and their placement is largely unrelated to the placement of the nouns they replace.
je, me, te, se, le, and la become j', m', t', s', l', and l' respectively before a vowel or mute h. See Elision (French).
The pronoun il and its forms refer to males (like English "he"), while the pronoun elle and its forms refer to females (like English "she"). However, as all French nouns (even inanimate and intangible objects) are either grammatically masculine or feminine, these pronouns can also refer to masculine and feminine nouns. In this case, both il and elle translate to the English pronoun "it". Il can furthermore be used as the direct equivalent of English "it" in order to refer to unspecified neuter things such as facts and ideas (e.g. Il pleut – "It's raining").
In formal French, the pronoun on is often replaced by l'on after a vowel (in particular after et, ou, qui, que, quoi and si); in particular, formal French often replaces si on and qu'on with si l'on and que l'on, respectively. This does not affect the meaning, only the pronunciation. In modern French, on has replaced nous as pronoun for the plural first person. Nous is used in formal usage.
In French, a group containing at least one male or one masculine noun is considered masculine, and takes the pronoun ils. Only exclusively female or feminine groups take elles.
Broadly speaking, lui and leur are used to refer to people, and y (see below) is used to refer to things. Lui and leur, however, will sometimes also be used to refer to things.
The second person
French has a T-V distinction in the second person singular. That is, it uses two different sets of pronouns: tu and vous and their various forms. The pronoun tu is informal and singular, spoken to an individual who is equal or junior to the speaker. The pronoun vous is used in the singular (but with second-person plural verb forms) to speak to an individual who is senior to the speaker or socially "more important" than the speaker. Vous is also used in the plural for all groups of people, whether junior, equal or senior.