A sequel is a work of literature or film that is written after a completed work, and is set in the same "universe" but at a later time. It usually continues elements of the first story, often with the same characters, although this is not always the case - for example, if the main character dies at the end of the first work, a new character (e.g. their son or daughter) may take up their role in the sequel.
An example of a sequel is the novel Harry Potter and the Chamber of Secrets by J. K. Rowling. Since it is the second book in the series, and follows Harry Potter and the Philosopher's Stone, it is that novel's sequel. Successful movies also have sequels, particularly horror and action movies.
Often sequels are criticized as artistically inferior, and accused of simply repeating the story of the original film. However, sometimes a sequel gives an oppurtunity to address weaknesses in the original. For instance, the film Star Trek: The Motion Picture was panned as overlong, boring and short on character play. In reaction, Paramount Pictures hired Harve Bennett to produce a sequel that addresses the criticisms; he produced Star Trek: The Wrath of Khan, which is considered one of the best films of the series.
A related word, prequel, is used to describe something that portrays events which precede those of a completed work, i.e., the opposite of a sequel. Star Wars is the best-known film that has multiple prequels. The story that comes between two previously published works is called an interquel.