Treasury bills are the shortest-term Treasury securities, those that mature within a year (from the time they are issued). The Treasury issues three- and six-month bills weekly and a one-year bill (the so-called yearbill) once a month.
Treasury bills are discount instruments. Rather than making interest payments, they are issued at a discount to face value and mature at face value. The interest rate is a function of the purchase price, the face value and the time remaining till maturity.
Bills are quoted in terms of their discount rate, or interest rate based on a 360-day year. As with bond yields, when the discount rate is going up, a bill is losing value. A "bond-equivalent yield" can be calculated for a bill, to allow for a comparison with other debt instruments.