Cell is the product of Dr Gero's creative mind. Cell was designed to have all the abilities of the greatest fighters on Earth, including cellss from: Goku, Gohan, Frieza, Krillin, Vegeta, Piccolo, and Tien. Dr Gero designed Cell to have the ability to absorb "bio extract", meaning any biological mass. He absorbs the bio extract by stabbing them with his tail, which then sucks the victim up from the inside out. This will increase Cell's power slightly, depending on the victim's power level.
Cell was designed to eventually absorb Android 17 and Android 18, in order to complete his evolution. Instead of stabbing them with his tail, they are instead sucked up whole, live through the tail. Cell absorbs Android 18, and evolves into what is known as Imperfect Cell. Then after absorbing Android 17, he evolves into Perfect Cell. Each time he absorbs an android his power level increases dramatically. However, he only ever absorbs those two androids.
Each individual cell in Cell's body has his complete DNA information, and due to Piccolo's regenerative abilities he is able to regenerate himself from just one cell.
At one point Cell creates what are called Cell Juniors. Seven of them. They look just like Cell, except they are blue in general, rather than green, and are about the size of a 5 year old human child. They inherit all the abilties of Cell, and are incredibly strong for their size. They are in part, responsible for Gohan's transformation to Super Saiyan 2.