"But as He who called you is holy, you also be holy in all your conduct, because it is written, 'Be holy, for I am holy'" (1 Peter 1:15-16).
The word "holiness" denotes the idea of separating or setting things apart from others. According to the New Unger's Bible Dictionary, holiness "is a general term used to indicate sanctity or separation from all that is sinful, impure, or morally imperfect; i.e., it is moral wholeness. The term is used with reference to persons, places, and things."
The Old Testament uses the term to refer to God (Lev. 11:44) and the presence of God (Ex. 3:5). It is also used to refer to the Sabbath (Ex. 20:8), the tabernacle and temple (Ex. 28:29; 2 Chron. 35:5), and the nation of Israel (Ex. 19:6) as things that are set apart for a special, God-centered purpose.
In the New Testament, the term is applied to God, Jesus Christ, the Holy Spirit, and various things; but the word "holy" is especially applied to God's people - Christians (Col. 3:12). We are called with a holy calling (2 Tim. 1:9). We are to be holy in our conduct, as God is holy (1 Pet. 1:15-16). Like Israel of old, we are a holy nation (1 Pet. 2:9), serving God as a holy priesthood (1 Pet. 2:5). The church (made up of individual Christians) is a holy temple in the Lord (Eph. 2:21). We are to lift up holy hands when we pray (1 Tim. 2:8), offering our bodies as living sacrifices, holy and acceptable unto God (Rom. 12:1). And we have, as our eternal inheritance, a place in the holy city - Heaven (Rev. 21:2, 22:19).